Redfinger | The Invisible War Between Netease And Tencent In The Overseas Gaming Market

Redfinger

NetEase and Tencent have been quite competitive in China, but this invisible competition still exists overseas. Especially in recent years, the two companies have acquired and invested a large number of console and stand-alone game manufacturers overseas, and the competition is becoming increasingly fierce.

At present, there are many investors in the overseas gaming market. The new studio Rebel Wolves, established by Konrad Tomaszkiewicz, the former director of the game “The Witcher 3: Wild Hunt”, and several former CDPR senior employees, announced that it has received investment from Netease games. Although the specific investment amount has not been disclosed, the transaction also includes the minority equity of the developer.

Rebel Wolves is developing a narrative based Dark Fantasy RPG game with UE5. Konrad Tomaszkiewicz said, “The studio will retain all the creative rights to IP and operate independently as always. Netease’s investment is the last piece of puzzle that we can develop at full speed. With available resources to build 3A games, we can now focus on the most important thing of game development.”

Just over a month ago, Dream Hunger, which had launched the game of survival and betrayal for many people, also received minority equity investment from Tencent. After its release, this “Dream Hunger” game ranked second in the world’s best-selling list, with sales exceeding 1 million in two months and the highest number of online users exceeding 100000. Just in the middle of 2022, Tencent announced that it had invested in From Software, the developer of Elden Ring, and NetEase revealed that it had acquired Quantic Dream, the developer of Detroit: Come Human, which showed a great sense of confrontation in the entire game industry.

It is estimated that in 2022 alone, NetEase’s investment in overseas game studios and the number of new overseas studios reached 10 (excluding NFT games), while Tencent was almost flat, reaching 9. 

The Competition Landscape of NetEase and Tencent

NetEase and Tencent have been quite competitive in China, but this invisible competition still exists overseas. Especially in recent years, the two companies have acquired and invested a large number of console and stand-alone game manufacturers overseas, and the competition is becoming increasingly fierce.

At present, there are many investors in the overseas gaming market. The new studio Rebel Wolves, established by Konrad Tomaszkiewicz, the former director of the game “The Witcher 3: Wild Hunt”, and several former CDPR senior employees, announced that it has received investment from Netease games. Although the specific investment amount has not been disclosed, the transaction also includes the minority equity of the developer.

Rebel Wolves is developing a narrative based Dark Fantasy RPG game with UE5. Konrad Tomaszkiewicz said, “The studio will retain all the creative rights to IP and operate independently as always. Netease’s investment is the last piece of puzzle that we can develop at full speed. With available resources to build 3A games, we can now focus on the most important thing of game development.”

Just over a month ago, Dream Hunger, which had launched the game of survival and betrayal for many people, also received minority equity investment from Tencent. After its release, this “Dream Hunger” game ranked second in the world’s best-selling list. With sales exceeding 1 million in two months and the highest number of online users exceeding 100000. Just in the middle of 2022, Tencent announced that it had invested in From Software, the developer of Elden Ring, and NetEase revealed that it had acquired Quantic Dream, the developer of Detroit: Come Human, which showed a great sense of confrontation in the entire game industry.

According to statistics, in 2022 alone, the number of NetEase’s investment in overseas game studios and the establishment of new overseas studios reached 10 (excluding NFT games). While Tencent was almost equal, reaching 9. The overseas investment war between two Chinese game head companies has been filled with gunpowder.

The Reason behind Fierce Competition 

The overseas investment war between Tencent and Netease is very reasonable and necessary for their development. The key factors of influence are mainly the following three points.

First, the examination and approval of the version number is more strict and the quantity is controlled, which is bound to make going to sea the best solution in the short term. In 2022, Tencent and NetEase only received the version numbers of two products.

Second, the competition in the domestic mobile gaming market can be described as fierce. At the annual meeting of the Chinese game industry last year, the Chinese console gaming market was disclosed for the first time. The revenue reached 2.58 billion yuan, with a year-on-year increase of 2.234 billion yuan. According to the data released by the famous statistical agency Ampere Analysis. The global console market revenue in 2021 has reached nearly 60 billion US dollars. Compared with the rapid development in China. The big cake in the overseas market is also a must for the two game companies.

In contrast, the personal computer market is obviously more optimistic. In October 2022, Valve announced that the maximum number of players on the online Steam platform would exceed 30 million. But what many people may not know is that the proportion of players using Chinese has already exceeded one third. Although this does not mean that nearly 10 million Chinese users are from domestic players. There is no doubt that Chinese players account for the majority of them.

Third, mutual containment. As one of the top head game companies in China, the relationship between Tencent and Netease. It is like that between Sony and Microsoft, which is more a game of business strategy. On the one hand, due to various reasons of the general environment, investment in the domestic market is cold, and overseas investment is undoubtedly better to operate. On the other hand, both well-known talents and mature studios with existing products. It can be regarded as formal game industry resources. The scramble for resources will inevitably curb the development of the other party’s overseas market in the future. And also open up the existing market for themselves in advance.

It should be noted that Microsoft and Google participated in the development of Android emulators. The Android subsystem in Windows 11 can run Android applications directly on the desktop. And the Google Play Games PC that Google will launch in 2022 can also run Android games on the computer. In the next few years, there are still questions about whether Tencent and NetEase will be committed to developing cloud gaming platforms

The Promising Future 

In the future, we may see more overseas games developed by these two companies appear on the market. And more domestic games developed by these two companies shine brilliantly in the overseas market. The current confrontation and layout is to gain opportunities and advantages for future development. Which is bound to promote the further integration and mutual promotion of domestic and foreign games and markets.

It can be predicted that the overseas mainframe market is full of infinite opportunities and challenges for domestic manufacturers. Such as the Apollo 11 spacecraft that first landed on the moon. No matter whether the future version number will change. This “overseas war” may continue, and more and more powerful game companies will participate in this fierce competition. 

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