Tencent shuts down video game streaming arm as crackdown weighs
Tencent Holdings, a giant in gaming and social media in China, will close down its Penguin Esports division by June 1, it announced on Thursday. This is as it continues to streamline its businesses after a regulatory crackdown.
According to WeChat, the company had made “changes in its business development strategy” to close down the platform. The platform was six years old, and hosts could stream themselves playing games. It didn’t elaborate.
Beijing stopped the company from creating a $10 billion videogame streaming giant through the merger between the top two players on the market, Huya (top) and DouYu (top), for antitrust reasons last year. Huya stated that it planned to merge Penguin Esports into a new entity.
Reuters reported that a broad-based Chinese regulatory crackdown on tech giants has been taking place over the past year and a quarter. It has forced them to overhaul once standard market practices and driven Tencent and Alibaba Group to prepare layoff plans, Reuters said.
Tencent announced on Thursday that Penguin Esports has stopped accepting new users and live-streaming hosts. It also said that existing users could not top up their accounts immediately. It was also announced that the app would be removed from all apps stores and cease to operate by June 7.
Tencent also pulled out other products in the past months, including its e-commerce platform Xiao’e Pinpin (February).
It also stopped service for popular video games, including Epic Games’ Fortnite, which Tencent planned to publish in China.