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Tencent’s new alternative to PUBG is already topping the revenue chart

In a move clearly driven by economic interests and an urgency to meet stringent regulations, the world’s largest games publisher Tencent pulled its mobile version of PlayerUnknown’s Battlegrounds on Wednesday and launched a new title called Game for Peace (the literal translation of its Chinese name 和平精英 is ‘peace elites’) on the same day.

As of this writing, Game for Peace is the most downloaded free game and top-grossing game in Apple’s China App Store, according to data from Sensor Tower data. That’s early evidence that the new title is on course to stimulate Tencent’s softening gaming revenues following a prolonged licensing freeze in China. Indeed, analysts at China Renaissance estimated that Game for Peace could generate up to $1.48 billion in annual revenue for Tencent.

Tencent licensed PUBG from South Korea’s Krafton, previously known as Bluehole, in 2017 and subsequently released a test version of the game for China’s mobile users.

Game for Peace is available only to users above the age of 16, a decision that came amid society’s growing concerns over video games’ impact on children’s mental and physical health. Tencent has recently pledged to do more ‘good’ with its technology, and the new game release appears to be a practice of that.

Tencent told Reuters the two titles are from “very different genres.” Well, many signs attest to the fact that Game for Peace is intended as a substitute for PUBG Mobile, which never received the green light from Beijing to monetize because it’s deemed too gory. Game for Peace received the license to sell in-game items on April 9.

For one, PUBG users were directed to download Game for Peace in a notice announcing its closure. People’s gaming history and achievement were transferred to the new game, and players and industry analysts have pointed out the striking resemblance between the two.

“It’s basically the same game with some tweaks,” said a Guangzhou-based PUBG player who has been playing the title since its launching, adding that the adjustment to tone down violence “doesn’t really harm the gamer experience.”

“Just ignore those details,” suggested the user.

For instance, characters who are shot don’t bleed in Game for Peace. A muzzle flash replaces gore as bloody scenes no longer pass the muster. And when people are dying, they kneel, surrender their loot box, and wave goodbye. Very civil. Very friendly.

“It’s what we call changing skin [for a game],” a Shenzhen-based mobile game studio founder said to TechCrunch. “The gameplay stays largely intact.”

Other PUBG users are less sanguine about the transition. “I don’t think this is the correct decision from the regulators. Getting oversensitive in the approval process will prevent Chinese games from growing big and strong,” wrote one contributor with more than 135 thousand followers on Zhihu, the Chinese equivalent of Quora.

But such compromise is increasingly inevitable as Chinese authorities reinforce rules around what people can consume online, not just in games but also through news readers, video platforms, and even music streaming services. Content creators must be able to decipher regulators’ directives, some of which are straightforward as “the name of the game should not contain words other than simplified Chinese.” Others requirements are more obscure, like “no violation of core socialist’s values,” a set of 12 moral principles — including prosperity, democracy, civility, and harmony — that are propagated by the Chinese Communist Party in recent years.

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China’s frenzy over League of Legends championship sheds light on esports growth

When China’s Invictus Gaming defeated European squad Fnatic in the League of Legends 2018 finals this past Saturday, China’s social media platforms became awash in ecstasy and pride.

“It’s like winning an Olympic gold, a teenage dream come true,” writes one thirty-something audience of the competition on his WeChat feed.

Many others share that sentiment. So far, the hashtag #IG冠军, which means “IG the champion,” has generated over one million threads on Weibo, China’s equivalent of Twitter with over four million monthly active users. This is a critical moment for China’s first-generation of players who grew up under parents and teachers who too easily dismissed all kinds of video games.

IG’s victory marks the first time a Chinese team has won the world championship for LoL – fondly called so by fans – the world’s most played PC game according to research firm Newzoo. The role-playing and monster-slaying title is run by Riot Games Inc, a Los Angeles-headquartered studio that WeChat operator Tencent fully bought out in 2015.

It wasn’t just gamers and the youth cheering for IG. Chinese mainstream media also rushed to congratulate. An op-ed from the communist party paper Guangming Daily called IG’s victory “an alternative path to the national sports dream.”

China has a history of obsessing over sports, evident in its generous spending on the Summer Olympics back in 2008 and the upcoming 2022 Winter Olympics. Now esports – or competitive video gaming – as an officially recognized sporting event, is gaining ground among policymakers.

Esports in China has grown from a 53.2 billion yuan ($7.72 billion) industry in 2016 into one that’s estimated to earmark 88.7 billion yuan ($12.87 billion) in revenue in 2018, according to research firm Gamma Data. Local officials across the country want a share of the booming market. In some cases, the governments have shelled out billions of yuan to turn their no-name towns into “esports hub” that would house competitions and gaming companies in hope of stimulating local economies.

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Private companies have joined in the game, too. Tencent, China’s largest gaming company by revenue, has invested in NYSE-listed Huya and Douyu, two of China’s leading esports livestreaming services. IG itself is an esports organization that Wang Sicong, son of China’s once richest man Wang Jianlin, founded in 2011 and catapulted to today’s stardom.

But China’s relationship with video games overall has always been murky. While the government is rooting for professional gaming, it’s tightening control over leisure ones, condemning game publishers like Tencent for “poisoning” juveniles with blockbuster titles.

“The Chinese government treats esports and leisure games very differently,” a staff in the esports division of a major global gaming studio who asks to remain anonymous told TechCrunch. “I don’t think IG’s victory will cause big changes to the government’s attitude.”

Tencent, which earns two-thirds of its revenue from online gaming, lost $17.5 billion in market valuation when China’s state newspaper slashed its popular Honor of Kings, widely regarded a mobile copycat of LoL. This year, a hiatus in game license approvals again puts pressure on Tencent stock prices and profitability.

For esports and League of Legends alone, however, IG’s glory could mean a brighter future.

“At least now we will see League of Legends’ popularity continue into a couple more years. Esports’ development may also benefit from the event,” suggests the gaming company staff.

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