Tencent released on Friday mobile party game
"DreamStar" that it hopes to challenge "Eggy Party", a
similar offering from NetEase (9999.HK) which has become a surprise hit this
year with 100 million monthly active users.
Analysts expect DreamStar to earn up to 6 billion yuan ($842
million) in its first year, while they forecast Eggy Party, which owes much of
its success to advertising on ByteDance platforms, to earn 8 billion yuan for
NetEase this year.
In a battle to defend its status as China's biggest gaming
firm,Tencent
has chosen to promote Dreamstar on ByteDance's popular advertising platforms
despite the two's rancorous history in barring one another from their
platforms.
About 38% of Tencent ads for DreamStar were put on
ByteDance's online ad service Pangolin in the last 30 days, making it the top
ad service Tencent has spent on for the game, according to data tracking firm
DataEye.
Its decision to rely heavily on Pangolin is remarkable
considering that Tencent has its own ad network and various promotion channels
within its product ecosystem.
Tencent has put only 12% of DreamStar ads on its own ad
network Youlianghui, according to DataEye.
The advertising layout is part of Tencent's plans for a 1.4
billion yuan investment to build out DreamStar's ecosystem to ensure its
success.
That strategy has also seen Tencent begin to let video game
live-streamers to stream on ByteDance platforms.
Zhang Daxian, China's top live-streamer who became famous
through playing Tencent's "Honor of Kings" game, started his channel
on a ByteDance platform earlier this month and previewed DreamStar, a scenario
unthinkable to many fans just a year ago.
For years, Tencent and ByteDance were locked in a series of
lawsuits against each other. In 2021, ByteDance sued Tencent for restricting
users from sharing content from Douyin - TikTok's sister app in China - on
Tencent's apps, citing anti-monopoly law.
In the same year, Tencent sued ByteDance for featuring
footage of Honor of Kings on a ByteDance platform, citing copyright
infringement.
The apparent thaw in their relationship comes as ByteDance
recently decided to wind down its gaming business to focus on its core platform
operations, marking a retreat from its competition with Tencent and NetEase in
gaming.
China's video games market returned to growth this year as
domestic revenue rose 13% to 303 billion yuan, putting Beijing's eight-month
industry crackdown two years ago in the rear-view mirror. -Reuters