Tencent’s patriotic PUBG replacement Game for Peace pays off with US$70 million revenue in May

China’s biggest social media and games company, Tencent Holdings, has seen its recent swap strategy pay off as Game for Peace, its newly-launched replacement for PlayerUnknown’s Battlegrounds (PUBG) Mobile in the China market, brought in an estimated US$70 million in player spending last month.

Combined with the original PUBG mobile title available outside China, the two versions generated an estimated US$146 million in revenue in May from downloads on the iOS App Store and Android’s Google Play, excluding third party Android stores, according to data from Sensor Tower.

That was a 26-fold increase compared to May last year when Tencent’s PUBG Mobile was available in China only as a free-to-play game.

The two versions of PUBG Mobile collectively became the world’s top grossing mobile app, ahead of another Tencent blockbuster, Honour of Kings, which raked in US$125 million in May, according to Sensor Tower.

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Tencent declined to comment on its game revenue.

Regulatory delays and a government crackdown on content have blocked Tencent from making money off the mobile version of PUBG, prompting it to close the title in early May and launch Game for Peace, which has similar game play and allows users to automatically migrate their data from PUBG.

Regulators gave Tencent approval to generate revenue from the new title in April.

On Thursday Tencent received two new game licenses after the government issued its latest batch of approvals for imported games. Licenses were also granted to other major gaming companies including NetEase and Perfect World.

Tencent’s games rebound comes amid a stricter regulatory environment on game approvals as part of the Chinese government’s efforts to clean up online content, protect children’s health and prevent gaming addiction.

The company’s overall video games business, which accounts for one third of its total revenue, slipped 1 per cent year on year to 28.5 billion yuan (US$4.1 billion) in the first quarter of 2019. The company reported a 3 per cent decline in mobile games revenue to 21.2 billion yuan because of fewer new titles released.

Tencent is stepping up its international expansion with plans to launch a mobile version of Call of Duty in the US, Japan, Europe, Latin America and Southeast Asia.

“Following the success of PUBG Mobile in international markets, we’ll seek to identify other China-developed games suitable for international publishing over the medium term,” James Mitchell, chief strategy officer and senior executive vice-president of Tencent, said in a conference call after reporting first quarter earnings in May.

Outside China, PUBG Mobile exceeded 100 million monthly active users in February, according to the company.