Wanda to tap into online gaming market, going head to head with Tencent and NetEase
Move comes as China’s box office market growth, a key driver of Wanda’s income over the past decade, has ground to a virtual halt since 2016
Wang Jianlin, Asia’s richest man, has declared his ambition of cracking China’s burgeoning online gaming market, which is currently dominated by internet technology giants Tencent and Netease.
Wanda Cinemas, the entertainment and property mogul’s movie venture, has unveiled a hefty pipeline of 13 online games revolving around best-selling Kung Fu fiction, blockbuster fantasy films and hit dramas.
Video games firm Perfect World and online streaming service iQiyi and LeEco will act as its partners in the development and distribution of some titles, the company said.
Blockbuster online games such as The King of Glory have become a cash cow for Tencent and NetEase, keeping millions of Chinese millennials glued to their smartphones or computers to buy often pricey virtual goods.
China’s box office market growth, meanwhile, a key driver of Wanda’s booming fortunes over the past decade, has ground to a virtual halt since 2016 amid a weak crop of film releases, with industry insiders seeing few signs of a substantial rebound anytime soon.
Those evolving dynamics have prompted Wanda Cinemas – which also owns the AMC Entertainment and Odeon theatre chains – to tap into the online games market, which has enjoyed an enviable annual expansion rate of 25 per cent.
“As a film maker, Wanda can leverage on its plentiful intellectual property – but it is very weak in terms of information technology, which is vital to the online games experience,” said Ray Zhao, a telecommunications, media and technology analyst with Guotai Junan.
“It has to rely on its tech partners like Perfect World to map out its online gaming business.”
Already the world’s largest, China’s online games market is expected to be worth US$20 billion by 2020, which would represent 33 per cent growth from 2015, according to researcher Niko Partners.
Zeng Maojun, president of Wanda Cinemas, has already said the company is aiming to become the third largest player in the games industry “second only to Tencent and NetEase” within two to three years.
Huayi Brothers, another major Chinese studio, has also ventured into online gaming to improve its revenues, faced with depressed movie ticket sales.
In the fourth quarter of last year alone, Tencent – which controls sales of China’s top three PC games, League of Legends, Dungeon and Fighter, and Crossfire – raked in over 10 billion yuan (US$1.45 billion) from online gaming. That’s only marginally lower than Wanda Cinemas’ full-year income in 2016.
Wang Sicong, the billionaire tycoon’s only son, is himself a renowned gaming wizard.
The 29-year-old Wanda board member founded multi-game, e-sports organisation Invictus Gaming in 2011 which won The International 2012 Dota 2 championship the following year.
In 2015, he launched an e-sports streaming services called Panda TV, which is hoping to go head to head with Amazon’s Twitch.tv.