Tencent's ambition to merge Huya and DouYu reportedly blocked

Reuters has reported that antitrust regulators in China will be blocking Tencent Holdings’ merger of the top two videogame streaming sites, Huya and DouYu. This comes as Tencent fails to produce remedies to meet the State Administration of Market Regulation's (SAMR) requirements on giving up exclusive rights.

Tencent also withdrew its merger application for antitrust review as it was unable to complete a resubmission within 180 days after submitting the application for the first time. The news of the merger of Huya and DouYu emerged last year. Currently, Tencent currently owns a 36.9% stake in Huya and more than 33% in DouYu. The two platforms hold the top two positions in China’s video gaming streaming industry, and is a popular destination for esports tournaments streaming and professional gamers.

China's game livestreaming market has been growing rapidly over the past few years. In 2019, the total revenues of Huya.com increased by 79.6% year on year in 2019 and the revenues of Douyu increased by 99.3% year on year, according to reports on iResearch. Its market size is expected to reach around 40 million yuan in 2021. The report said that the growth was driven largely by the control of the costs of bandwidth, and streamers who drive continuous improvement of the platform's profitability.

Meanwhile, Tencent Cloud has also inked a deal with Japanese livestreaming app Yell Live to beef up online influencers’ livestreams and fan interactions. The collaboration serves to address the exponential growth of influencer livestreaming in relation to eCommerce globally.

Last month, Tencent was also  slapped with a lawsuit from Chinese public interest group Beijing Teenagers Law Aid and Research Center for allegedly having “inappropriate content for minors” in its popular game Honor of Kings. The public interest group said on its official WeChat account that this is the first time a social organisation in China has initiated a civil public interest lawsuit for the protection of minors.

Beijing Teenagers Law Aid and Research Center alleged that Tencent has progressively lowered the recommended age limit for Honor of Kings from 18+ in 2017 to 16+ and more recently to 12+ this year. However, the public interest group said the game’s content and settings do not meet the age appropriate 12+ recommendations in terms of character images, lottery rules and chat channels. Also, the group said on its WeChat account that the characters in the game are too revealing and that Honor of Kings’ website and community contain plenty of “pornographic and vulgar content” that are inappropriate for minors.

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