Business

Tencent starts the creation process of a $10 billion streaming giant, says Bloomberg

The company proposes a merger between DouYu and Huya, creating a streaming giant with more than 300 million users

Team of asian teenage cyber sport gamers play mobile game by smartphone on eSport tournament. Photo: Shutterstock
  • Tencent owns a 37% stake in Huya and a 38% stake in Douyu and intends to become the largest shareholder in the combined entity;
  • Bloomberg says the deal would reinforce Tencent’s position in the domestic market amid the growing hostility of the American President Donald Trump’s administration against Chinese tech companies.

Tencent, the operator of WeChat, proposed a deal to merge the gaming platforms DouYu with Huya, creating an Amazon’s Twitch-like Chinese game streaming leader with a market value of more than $10 billion, says Bloomberg.

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The Chinese giant has offered to buy 30 million shares of Huya from part-owner Joyy Inc, itself a live-streaming service operator, for $810 million, Joyy said. It separately proposed a merger via a share swap of Huya and Douyu, they said, confirming a deal Bloomberg reported last week.

Currently, Tencent owns a 37% stake in Huya and a 38% stake in Douyu and intends to become the largest shareholder in the combined entity, according to Bloomberg. The deal would create an online giant with more than 300 million users and the streaming service would be highly profitable, akin to Amazon’s Twitch. 

The merge would also reinforce Tencent’s position in the domestic market amid the growing hostility of the American President Donald Trump‘s administration against Chinese technology companies.

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Bloomberg said the deal would allow Tencent to dominate the $3.4 billion Chinese live-streamed gaming arena. It already features marquee games like PUBG Mobile and Honor of Kings, as for Huya and DouYu have established a clear lead as the top two platforms. The media outlet also says that revenue growth slowed down for both in recent quarters as users shifted their attention to ByteDance’s Douyin, the Chinese twin to the globally popular TikTok.

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According to Bloomberg, a merger would help them lower broadcast and content costs at a time when rival video services like Kuaishou and Bilibili (both also backed by Tencent) intensify their efforts to compete for more gaming content.