Huya-DouYu merger would cement gaming giant Tencent’s position in China, experts say

Tencent is reportedly driving discussions to merge China’s two biggest video game live-streaming platforms, Huya and DouYu

The merger may help cement Tencent’s position domestically at a time when Chinese tech companies are undergoing heavy scrutiny overseas, experts say

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Published: 6:00am, 7 Aug 2020Updated: 6:00am, 7 Aug 2020

A merger between China’s biggest video game live-streaming platforms, Huya and DouYu International Holdings, could help cement Tencent Holdings’ lead as the largest video game company in its home country amid a turbulent geopolitical environment, experts say.

On Wednesday, Bloomberg reported that Tencent – which owns a 37 per cent stake in Huya and 38 per cent of DouYu – was driving discussions to merge the two game-streaming platforms, according to people familiar with the situation.

The deal would create an online giant with more than 300 million users and a combined market value of US$10 billion, and Tencent is looking to become the largest shareholder in this entity, according to the report.

Tencent and DouYu declined to comment on the report. Huya did not immediately respond to queries.

Talk of the deal comes at a time when Chinese tech companies are under heavy scrutiny in the US and other markets, and experts say it could be a strategic move for Tencent to secure its position in its home market by expanding its control across the gaming supply chain.

Thomas Rosenthal, general manager of Asia-Pacific for game publisher 505 Games, said Tencent may be looking to turn the live-streaming sites into all-in-one gaming platforms by combining live-streaming, e-commerce and cloud gaming in a single place.

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