Tencent's Gaming Empire & Honor of Kings with Matthew Brennan

Matthew Brennan, co-founder of China Channel and host of China Tech Talk joined us in a conversation to discuss Tencent’s gaming empire worldwide and their third killer app after QQ & Wechat: Honor of Kings. We discussed the recent major happenings from Tencent in their purchase of stock from Snap in the US and bypassing Facebook’s market capitalisation temporarily, and how they assembled their gaming portfolio and assets, particularly Honor of Kings, in a strategy as the top gaming company now in the world and mitigate against the concerns of the Chinese government in mobile gaming addiction.

Here are the interesting show notes and links to the discussion (with time-stamps included):

• Matthew Brennan, Co-founder of China Channel dot co (@mbrennanchina , Linkedin, Wechat:Yowdy-CQ) [0:38]
  • Since our last conversation, what have you been up to? [1:42]
  • What happened in the CHina CHat 2017 event you organized in Sep 2017? [2:28]
  • Specifically for key opinion leaders (KOLs), what are the major points of discussion the CHina CHat conference 2017? [3:18]
• Tencent’s Gaming Empire and Honor of Kings [5:08]
  • Few interesting news recently: In Tencent’s history, it is incorporated on 11 Nov (or now what we called double 11 or Singles Day – the most important event in ecommerce), and it has bypassed the market capitalisation of 534.5B against Facebook of 519.5B, what are your perspectives on these issues? [6:08]
  • Tencent has built up a third revenue stream within the company other than advertising and payments and that is gaming. Can you briefly discuss the efforts of Tencent in this space and what their gaming revenues are as part of the whole company’s revenues? [10:03]
    • Note: Tencent makes 41% revenue from games in Q3 2017. As the percentage of revenues are going down over time closer to 50% a year or two ago, absolute numbers going up. Mobile gaming overtook PC clients game revenue last month.
    • Started with the key titles: Dungeon and Fighter, Crossfire.
    • Tencent owns two studios: Riot Games in the US which made Honor of Kings and Supercell that made Clash of Clans.
    • Mobile key titles: Honor of Kings (HoK), Lead of Legends (LoL), Player Unknown’s Battlegrounds [13:28]
    • Key acquisitions: Riot Games (November 8, 2013 LoL $231M), Supercell (21 June 2016, 84.3% of Supercell with USD 8.6 billion, Clash of Clans)
  • How Tencent compete against Alibaba in China and Facebook in the rest of the world. [15:28]
  • A lot of us know Tencent with their two killer messaging apps, QQ and Wechat but in a recent episode on China Tech Talk, you discussed that they have the third killer app: Honor of Kings, can you describe what this app is about and why it is taking China and outside world by storm? [17:40]
  • Honor of Kings have a very strong offline presence as well, can you briefly talk about that? [21:00]
  • What do you observe Tencent is doing with Honor of Kings outside China, for example, Thailand [23:15]
  • Does Tencent leverage on its social capability to extend into the media content business in the way how they have successfully done so with the gaming business in their portfolio? [28:10]
  • The Chinese newspaper, People’s Daily wrote a scathing column on Honor of Kings regarding people’s addiction on the game, how does Tencent mitigate these issues with the game? [30:36]
• Closing
  • Can you recommend a book, podcast or anything else that has impact to your work and personal life recently? [32:37]
    • Matthew’s recommendation: China Influencer Podcast
  • How do my audience find you? [33:14]

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The show is hosted by Bernard Leong (@bernardleong & weibo) and are sponsored by Ideal Workspace (Twitter, Facebook and LinkedIn) with their new Altizen Desk on Indiegogo (Twitter, Facebook, Medium). Also check out Ideal Workspace’s new standing desk, Altizen and sign up for their mailing list. Sound credits for the intro music: Taro Iwashiro, “The Beginning” from Red Cliff Soundtrack.