Hong Kong: Tencent is shutting down its game streaming service, the latest Big Tech retreat in the face of a broad crackdown by Chinese regulators that has hampered development at some of the country’s most prominent internet firms.
Penguin Esports, a streaming platform, stated on Thursday that all services would be discontinued on June 7, citing “business growth plan” changes. Antitrust officials stopped Tencent from integrating the firm with its other live streaming holdings just nine months ago.
Tencent launched Penguin Esports in 2016, and it’s comparable to Amazon’s (AMZN) Twitch service. It has the rights to stream a number of Tencent’s popular titles in the nation, including Honor of Kings and League of Legends, as well as esports contests.
Penguin Esports, on the other hand, hasn’t come close to being a market leader. According to China’s antitrust authorities, Nasdaq-listed Huya (HUYA) and Douyu (DOYU) are now leading the video game streaming warfare, accounting for more than 70% of the industry. Tencent also has a significant investment in Huya and Douyu.
Tencent intended to sell Penguin Esports to Douyu for $500 million in 2020, then merge Douyu and Huya into a new firm to consolidate its platform shares. Based on the stock values at the time, the purchase was worth approximately $6 billion.
The merger, however, was stymied. In a statement issued in July, the State Administration of Sector Regulation stated that the combination of Douyu and Huya will expand Tencent’s dominance in the video game streaming market, giving the corporation too much market power and perhaps inhibiting fair competition.
Penguin Esports was shut down as a result of an extraordinary government crackdown that has hampered revenue growth at the country’s most prominent internet firms, forcing them to lay off workers and search for methods to cut expenses.
Chinese authorities have been waging a broad campaign to rein in major companies in areas ranging from internet and banking to gaming, entertainment, and private education since late 2020.
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