Industry

Tencent to Merge Douyu and Huya to Compete with Bilibili and Kuaishou

Aug 06, 2020, 17:42pm2020/08/06 17:48:51 Caiwei Chen

According to Bloomberg, Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> is planning to consolidate Huya and Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />, the two biggest gaming-focused live-streaming platforms in China. The proposal has been raised to the level of the company’s general office and the merger can be completed within the year if the company moves fast enough, according to a Chinese media outlet. Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> is already Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />’s biggest shareholder and also owns over a third of Douyu.

Reuters cited sources familiar with the matter that Tencent seeks to control or at least become the biggest shareholder of the merged entity. If completed, the deal would create an online game streaming giant with more than 300 million users and a combined market value of $10 billion, further solidifying Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />’s lead in Chinese games and social media.

SEE ALSO: Huya Stocks Rise Over 7% Against The Market, Could Merge With Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> By the End of This Year

According to data from MobTech, the combined entity will take up to 80% of the market. The source also said that a merger could also involve eGame, Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />’s own streaming site and ranked No. 4 in the country. The potential merger will significantly lowered the cost of competition in the game live-streaming industry, while giving the new platform an edge in competition with Bilibili<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />, a YouTube like video platform that is also marching into the esports realm.

Both Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> and Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> have not responded in regards to the issue. Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />’s shares surged 18% in pre-market trade in New York, while Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> soared 15%. Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> climbed 2% to a two-week high in Hong Kong.

From 2019, the League of Legends World Championship Series, the most popular esports game in China’s gaming community, started to adopt a new auction system to sell its exclusive run in China. Bilibili won 3-year exclusive broadcasting rights for 800 million yuan over competitors including Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> and Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />. Kuaishou Esports Livestream, a services backed by Kuaishou, Douyin’s biggest rival in China, is also pushing into the game streaming realm by signing various professional esports players.

NetEase<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> News cited a source with direct knowledge of the matter that “To Tencent<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />, Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> is a pawn, Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> is a friend, while Kuaishou and Bilibili<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> are opponents.” The source also said that there is a high chance that Douyu<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> and Huya<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> will be able to keep their independent operation team after the consolidation.