Tencent’s WeGame platform in push to go global, heating up rivalry with PC gaming site Steam

Tencent Holdings, which runs the world's largest video games business by revenue, is set to launch the international version of its WeGame store and social platform in Hong Kong, with the aim to build up the overseas market for China-developed personal computer games.

WeGame, an upgrade from the previous Tencent Games Platform, went online in September last year as a Chinese-language site where users can watch live-streaming video games, access support tools for communication between players and developers, and download PC and stand-alone games.

“The Hong Kong version of WeGame is now under development,” said a spokesman for Shenzhen-based Tencent in a statement on Friday. “This version will be available for overseas users, and we will use this platform to bring more Chinese games to the global market.”

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WeGame, China’s biggest PC games distribution platform, currently offers about 220 titles available for download, including games developed overseas. Don't Starve Together, a multiplayer survival game developed by Canadian independent studio Klei Entertainment, had sold more than two million copies on WeGame by April, according to Tencent.

The Hong Kong-listed internet giant’s move to ratchet up WeGame’s international expansion followed last month’s announcement by US games developer Valve Corp that it was bringing its Steam distribution platform to China, under an exclusive partnership with Nasdaq-traded Chinese entertainment conglomerate Perfect World.

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While the new Steam China site has no scheduled launch date, the US PC games platform has already amassed a large user base in China, as more than a quarter of Steam users have set their language preference in Simplified Chinese, according to a survey by Valve in May.

Although WeGame is still the underdog in its rivalry with Steam, it has advantages including localised content, a support scheme for independent Chinese game developers as well as Tencent’s massive social media networks – at least within the domestic market, noted Turian Tan, a gaming analyst with research firm IDC in Beijing. “With its huge user base from distribution channels including WeChat, QQ and vlog platforms, Tencent can provide a significant amount of exposure for games released on WeGame,” said Tan.

At stake in this clash of major gaming platforms is the global boxed and downloaded PC games market that research firm Newzoo has estimated to be worth US$28.6 billion this year.

It is a segment of the games market in which WeGame is behind. Steam, the world’s largest PC gaming platform with more than 20,000 titles, has 43 million daily active users, according to Valve in a report by tech news site Road to VR on Thursday.

Still, Tencent has been stepping up its efforts to develop a large war chest of valuable gaming content. The company owns significant stakes in US-based developers Riot Games, Epic Games, Glu Mobile and Activision Blizzard, as well as South Korean firm CJ Games and Japanese company Aiming.

In a separate move, WeGame announced in a July 7 online event that the platform will bring dozens of new titles to Chinese PC gamers in the coming months. These will include some of the world’s most popular games such as Monster Hunter: World, an action role-playing game which is currently only available on PlayStation 4 and Xbox One, and Fortnite, the viral battle royale game from Epic.

Amid the rapid growth in smartphone gaming worldwide, Tencent spent US$8.6 billion to take over Finnish mobile game developer Supercell in 2016.

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The overall video games market, which includes the larger console and smartphone games segments, is expected to reach US$137.9 billion this year, according to Newzoo.

Tencent’s international expansion initiative for WeGame could also help the company speed up the release of new titles, which would be outside the purview of Chinese regulators.

Publishers in China are required to submit games for review to authorities so these can be sold in the domestic market. This process typically takes months to complete, and games with the slightest violent or sexual content are likely to get rejected.

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Tencent, for example, has yet to publish the PC version of PlayerUnknown’s Battlegrounds in China, almost a year after winning the hit survival shooter game’s local distribution rights.

By launching a Hong Kong-based WeGame platform, Tencent could be able to get around the mainland’s strict censorship rules to cater to a large international audience.