Chances are, if you play one of several popular games on the market right now, Tencent is involved somehow. The list of Tencent properties is enormous, and thanks to the games industry boom brought on by COVID-19, the Chinese conglomerate is rapidly becoming one of the most powerful companies in gaming. Now, it may be preparing to extend its reach into the console and gaming peripherals market, according to recent patents the company has filed.
The conglomerate has complete ownership of Riot Games, the American studio and publisher behind the wildly successful League of Legends and Valorant, as well as 5% stakes in Activision Blizzard and Ubisoft. Tencent also purchased a 40% stake in Epic Games, creator of the Unreal Engine and Fortnite in 2012 for $330 million — Sony purchased a 1.4% stake of Epic in 2020 for a reported $250 million, followed by another $200 million just last week — and purchased an ownership stake in Finnish mobile developer Supercell for $8.6 billion in 2019 in one of the biggest deals in gaming history. These are only some of the most notable deals among Tencent’s catalog of approximately 30 studios and publishers.
One of Tencent’s major areas of expertise is mobile technology, and with nearly every acquisition or investment in a major studio, a mobile version of a popular title has followed. Riot Games has released mobile versions of its games Legends of Runeterra and Teamfight Tactics, and recently released Wild Rift, an abridged version of League of Legends. Shortly after it invested in Activision Blizzard, the publisher began releasing mobile versions of Call of Duty titles. Tencent’s involvement with Epic Games led to the wildly popular IOS version of Fortnite, which was removed from the App Store as part of an ongoing legal battle between Epic and Apple.
That mobile experience, combined with growing investments in console and PC gaming, is what’s allowing Tencent to test the waters of releasing gaming hardware. A recently obtained patent shows that Tencent is developing a handheld “PC Gaming Console” that closely resembles the Nintendo Switch but has Windows PC buttons. If released, it would presumably allow users to play PC games on the go, and, given Microsoft’s recent efforts to merge its Xbox and Windows player bases through Game Pass, could potentially allow access to Xbox’s PC catalog.
The Nintendo Switch, from which Tencent’s tentative handheld clearly takes inspiration, is not that far a cry from Tencent’s own capabilities — the Switch runs on an advanced mobile processor developed by ARM Holdings, after all, and its subsidiaries have experience developing on mobile platforms with some even porting their games to the Switch. Tencent is also the distributor of the Switch in China.
The patent is more a sign of Tencent exploring the potential of releasing gaming hardware than it is a sign that they’re about to compete with Nintendo, Microsoft and Sony in the console race. After all, as analyst Daniel Ahmad notes, the idea of a PC Gaming handheld is not new and previous iterations by other companies have not performed well. “These devices are not that cost efficient and don’t provide the same dedicated gaming environment that an actual handheld console does,” Ahmad wrote on Twitter.
Still, Tencent has been riding the pandemic and its gaming boom to incredible growth. Since January 2020, the company has over doubled its number of open job listings, shooting up from 4,180 to 8,320 as of the most recent count, according to Thinknum data, and that manpower has to be going somewhere. Tencent doesn’t just invest in video game companies; it’s also the owner of WeChat, one of the most popular messaging apps in the world, as well as several other digital products and services.
While the patent for the “PC Gaming Console” is not a surefire sign that Tencent is trying to break into the console race, another patent for a gaming controller is yet another sign that Tencent may, at the very least, be preparing to develop and release gaming peripherals. Either way, Tencent is expanding its workforce at breakneck speed and is likely to become an even larger presence in the industry as time goes on. However, the recent failures of Amazon Luna and Google Stadia to quickly produce hit consoles and games may be a deterrent for Tencent or any other tech conglomerate looking to break into video games.
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
