Armies of Dragons on WeChat? China's Tencent teams up with Hong Kong-based Animoca to tap Asia's 760 million-plus gamers

PUBLISHED : Wednesday, 23 September, 2015, 9:59am
UPDATED : Thursday, 21 June, 2018, 3:17pm

Tencent Holdings, Asia-Pacific’s largest internet company, aims to bolster its slate of mobile games for distribution outside mainland China through a major new deal with Hong Kong games developer Animoca Brands.

Under an exclusive agreement announced on Wednesday, Tencent will distribute Animoca Brands’ popular Armies of Dragons mobile game across its WeChat social messaging service in Hong Kong, Singapore, Indonesia, Malaysia and Thailand.

“The agreement with Animoca Brands feeds into an ongoing push from WeChat to diversify its offering and expand into new vertical industries, including gaming,” an Animoca Brands spokesman said. 

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WeChat, known as Weixin in mainland China, is the country’s most popular messaging service, with a service footprint that extends well beyond its home market’s borders.

It added more than 50 million new accounts in the quarter ended June 30 to reach 600 million monthly active users, according to Tencent.

Armies of Dragons, which Animoca Brands originally released in August last year, is a free medieval-themed “tower defence” strategy game that runs on both Android and Apple’s iOS devices.

Hong Kong-listed Tencent and Animoca Brands, which trades in the Australian Securities Exchange, agreed to distribute the game on the WeChat platform for a period of one year, with a revenue-share arrangement from in‐game purchase options.

Armies of Dragons will be available for download on WeChat this November. 

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“The deal includes the right of first negotiation to exclusively publish and distribute sequel titles or games substantially similar to Armies of Dragons, which opens up further opportunities for the company to publish additional games on WeChat in the future,” the Animoca Brands spokesman said.

Animoca Brands' current portfolio of published mobile games includes titles based on the US comic strip Garfield, as well as Japanese animated franchises Astro Boy, Doraemon and Ultraman.

Alicia Yap, the head of China internet research at Barclays, said in a report that Tencent was keen to expand its mobile games user base by introducing “more differentiated and innovative game genres, such as tower defence and shooting games”.

“In the second quarter this year, Tencent added seven new games to its Weixin and mobile QQ game portfolio,” Yap said. 

She forecast the total mobile games revenue for WeChat this year to reach 16.5 billion yuan (US$2.6 billion).

According to an industry report by the Global Mobile Games Confederation, messenger applications are playing a key role in distributing games across the Asia-Pacific.

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The Asia-Pacific represents the world’s largest market for mobile games, the report said. It estimated the region had a total of 760 million mobile gamers last year, generating US$13.6 billion in revenue — accounting for 55 per cent of the global mobile gaming market in the same period.

The deal with Shenzhen-based Tencent followed Animoca Brands’ recent strategic partnership with Chinese games publisher Ourpalm.

In July, Ourpalm made a cash investment of A$3.1 million (US$2.2 million) in Animoca Brands to purchase 14.8 million ordinary shares, representing 11.11 per cent of the game developer’s expanded share capital.

Ourpalm, which is headquartered in Beijing and trades on the Shenzhen Stock Exchange, also has an option to further invest up to US$5 million in Animoca Brands.