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Tencent to Close Esports Streaming Arm Over Crackdown

The social media and gaming firm announced on its official WeChat account that it’s decided to shut down its Penguin Esports unit in June


Tencent axes gaming unit
A staff member a Tencent booth at the 2020 China International Fair for Trade in Services in Beijing, China, in 2020. Photo: Reuters

 

Chinese tech giant Tencent Holdings will shut down its Penguin Esports unit by early-June, it said on Thursday, as it streamlines its businesses following a regulatory crackdown. 

The company announced on its official WeChat account that the decision to shut down the six-year-old platform, where hosts could live-stream themselves playing games in a model similar to Amazon’s Twitch, was made because of “changes to its business development strategy.”

Beijing last year blocked the company’s attempt to create a $10 billion videogame streaming behemoth through the merger of the market’s top two players Huya and DouYu on antitrust grounds. Huya said at the time it planned to merge Penguin Esports into the new entity. 

 

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A wide-ranging Chinese regulatory crackdown has targeted tech giants over the last year and a half, forcing them to revamp once common market practices and driving Tencent and peer Alibaba Group to draw up layoff plans.

Tencent said on Thursday that Penguin Esports had stopped taking new users or live-streaming hosts and had also blocked existing users from topping up their accounts with immediate effect. The app will be removed from all app stores and will stop operating by June 7, it added. 

Other products Tencent has withdrawn in recent months include its e-commerce platform Xiao’e Pinpin in February.

It also stopped services for video games including Epic Games’ smash-hit Fortnite, which Tencent had planned to publish in mainland China. 

 

  • Reuters with additional editing by Sean O’Meara

 

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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