Chinese gaming giant Tencent held its 2021 annual games showcase online on May 16th, with more than 60 new games and apps showcased. Tencent is currently the largest video games company by total revenue. It achieved annual revenue of ¥156.1 billion yuan or $23.8 billion from its online games business. In Q4 2020, more than 25% of its games revenue came from outside China.

The showcase lacked focus due to its lengthiness and the lack of any blockbuster announcements, but Tencent used the event to systematically demonstrate its development diversity, its growing list of partners and to improve its brand image. Like other major publishers in mainland China, Tencent is aiming to promote a culturally and socially positive image at a time when Chinese tech companies are under pressure from the government's antitrust scrutiny.

Tencent is exploring the diversified value of video games

Different from the content-focused conferences of other games companies, Tencent's conferences often pay more attention to the social responsibility of the game. The 2021 event was no different and presented applications in education, science and culture. For example, Tencent showcased Kouding which is a game-based programming tool and platform for students aged 6-18. Yanqiulin, the mobile puzzle game aiming to promote Chinese traditional painting, was given a long presentation on how they hand-paint the characters and settings on paper and digitalise them.  

Tencent is stepping closer to its own "Metaverse" by releasing multiple sandbox titles

Steven Ma, senior vice president at Tencent, highlighted Travis Scott's concert in Fortnite at the beginning of the event, which led to a central theme of the entire showcase: the construction of a "Hyper Digital Reality"- Tencent's metaverse initiative, which means to connect the virtual world with reality, to connect people with society and each other, and to create real value from video games.

Peacekeeper Elite (the Chinese version of PUBG Mobile) has also introduced concerts of Chinese pop stars and the game will also open up an editor to facilitate user-generated content. The addition of three sandbox titles that have obtained approvals in China, Roblox and Ylands, which will both be published by Tencent in mainland China, and Handmade Planet developed by Tencent itself, will provide strong competition to Minecraft which is being published in China by NetEase. The adventure title Our Planet by Hero Games, and action MMO Shin Kaku Gi Kou by Good Media Limited, which feature sandbox elements, are also starting beta this year, but they are still waiting for the nod from the Chinese regulators.

Tencent's cloud gaming strategy is being accelerated

The X86 architecture-based cloud gaming service START is adding Overcooked! to its library, which is in line with its positioning for family users on the big screen. Based on the ARM architecture, Tencent First Play, which focuses more on mobile games, released a controller to improve the cloud gaming experience. In this year, Tencent also invested in Ubitus, a cloud gaming technology provider, and joined with other investors such as Sony.

Tencent keeps expanding its international IP pool

Tencent is sparing no effort in gaining access to world-renowned IP through partnerships with developers and publishers. Tencent's dominance of the domestic market is a key leverage in gaining access to third-party IP. A batch of mobile games based on popular IPs appeared at the conference, such as Harvest Moon Mobile, Metal Slug Mobile, Digimon: New Century, Project: Fighter (One Piece Mobile), Uncharted Waters: Lord of the Sea and more, most of which are developed by Tencent.

In recent years, the R&D capabilities of Chinese game companies on mobile platforms have gradually been recognised by the industry. The cooperation with Chinese companies also makes it easier to introduce products to China. Therefore, Chinese developers are more and more often to be seen in mobile adaptations for some of the famous IPs. Tencent's closest competitor, NetEase, also has access to substantial IP including The Lord of the Rings, Diablo, Westworld, Harry Potter, Marvel, and Frostpunk. We will hear the latest on these games at NetEase's own showcase on May 20th.

There is more content to come…

It should be noted that the information at this conference is focused more on mobile platforms and is only a share of the content that Tencent is actually working on. Tencent is currently recruiting in Shanghai and Shenzhen for its 2 ongoing AAA projects, one is an open world game and the other a shooter, underlining that Tencent is still keen to access the global console market.

Additionally, Pokémon Unite is currently in the final stage before the official release, and the official Twitter also hinted that there will be an update soon. Based on an IP with a huge fan base in China, Dungeon Fighter Mobile, which appeared at the conference last year, was absent this year after the postponement. When will the game be released on mobile? These questions will only be answered by Tencent after the showcase.

Table: A full list of content announcements at Tencent's annual games showcase