The war between two of China’s biggest esports companies might soon come to a truce at the will of their financier, Tencent.
Tencent, the world’s biggest games publisher, revealed late Monday a proposition to combine Douyu and Huya, the contending live-streaming websites focused on video games. Instead of paying in money, the offer will see the pair get in a stock-for-stock merger.
Tencent will also purchase 1 million shares from Huya CEO Dong Rongjie. Upon the transaction, Tencent will hold 51%of Huya’s shares and 70.4%of its ballot rights.
Tencent is also the biggest investor of Douyu, with a 38%stake and voting power.
What this means is the esports platforms that have actually long fought neck and neck for audiences and live-streaming hosts may soon require to collaborate. That’s great news for financiers who have actually been hemorrhaging cash.
NYSE-listed Huya has a present market cap of $5.27 billion and Nasdaq-traded Douyu is worth $4.44 billion, providing the duo a combined worth of around $10 billion. The set will together manage more than 300 million monthly esports users. By March, Douyu had 158 regular monthly active users and Huya claimed 151.3 MAUs, though there can be overlaps.
Could Mr. Dong be relinquishing control of Huya as he gives up a substantial quantity of shares? Joyy currently signified its retreat in the first quarter when it stopped folding Huya’s operating results into its own report.
Ammo for Tencent
Market observers believe the merger can considerably expand Tencent’s reach in the gaming supply chain. The company is the publisher behind smash hits like the mobile versions of PUBG and Call of Task, and the addition of a live-streaming empire will allow it to catch not simply players but also the larger esports spectatorship.
It deserves noting that Tencent has its own in-house Penguin Esports that’s a counterpart to Douyu and Huya. It’s not hard to picture the 3 players incorporating resources and generating synergies under Tencent’s oversight.
While Douyu and Huya focused on esports from the start, more general-purpose video services like Bilibili and Kuaishou have been drawing legions of esports users in recent years. Lo and behold, Tencent is also an investor in Bilibili and Kuaishou.
TechCrunch.
