This is good news for Twitch, bad news for a market whose players are gradually tending to become fewer. After the closure in 2020 of Mixer, Microsoft’s video game streaming service (in favor of a partnership with Facebook Gaming), it is this time a Chinese player in the sector which will close its doors: Penguin Esport, platform of the giant Tencent, world number 1 in video games. The company announced this week that it will take its service offline next June, following ” changes in business strategies “.
As specified TechCrunchPenguin Esport, which is similar in concept to Amazon-owned Twitch, has failed to carve out a big enough foothold in China, its target market.
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Tencent closes Penguin Esport… and doesn’t lose much
However, it should be noted that this closure is not a tragedy for Tencent. Through previous takeovers, the firm already owns the two largest game streaming platforms in China: Douyu and Huya. Together, they have nearly 70% market share.
Penguin Esports, for its part, was plagued with strong competition, in particular from Bilibili and Kuaishou (rival of Douyin, the Chinese version of TikTok). The two groups weigh respectively 10 and 40 billion dollars and invest massively in the acquisition of exclusive streaming licenses. Two behemoths in which Tencent is also a shareholder. Its importance in the video game streaming market therefore remains major.
Added to this strong competition for Penguin Esports was an increasingly serious problem in China: since 2021, the authorities no longer grant publishing licenses for new games. This situation has already led to the bankruptcy of nearly 14,000 Chinese video game studios and leads to an increasingly disabling lack of new content for streaming platforms. The closure of the service therefore occurs in a very specific context and does not compromise Tencent’s projects on the market.
On the other hand, the firm suffers much more from the decision of the Chinese authorities to prevent the merger of Douyu and Huya. Wanted by Tencent, this merger “ would have the effect of eliminating or restricting competition according to Chinese regulators… who therefore put their veto.