China's largest gaming company revs up its overseas expansion

Tencent Holdings is preparing to roll-out Honour of Kings across the West from as early as September

Tencent Holdings is preparing to roll out smash-hit Honour of Kings to the US and Western Europe from as early as September, introducing its single most profitable mobile game to millions of new players beyond China, people familiar with the matter said.

China’s largest internet media company is accelerating the global rollout of the blockbuster title to diversify its revenue base, the people said. The company, best known for its WeChat messaging service, aims to build on the success of a title that may account for a majority of its smartphone gaming revenue this year.

Tencent may also be trying to create a truly global title to stand beside foreign acquisitions League of Legends and Clash of Clans. The self-developed Honour of Kings, in which players hack and slash their way through battle arenas, has been gradually introduced to select markets beyond China, such as Turkey and Thailand. Now it will also launch in the US, France, Italy, Spain and Germany, the people said.

Those versions of the title are expected to incorporate local touches: some of the existing international takes let players assume the mantle of Van Helsing or Batman for instance, in a tie-up with Warner Bros. Interactive and DC Entertainment. Tencent’s already renamed the app Strike of Kings in many non-Chinese markets. The Shenzhen-based company declined to comment.

The game is free to download and generates revenue from users who buy upgrades to improve their odds in battle.

Taking Honour of Kings to more foreign markets furthers Tencent’s ambition of spreading its footprint beyond China, while fortifying an industry dominance it bought with Supercell Oy and Riot Games. The move would also help the company shed its reliance on a home market where regulatory sentiment often proves unpredictable. The company came under fire this week after the Chinese government’s premier newspaper blasted Honour of Kings for cultivating addiction and harming children in the pursuit of profit.

The game has so far been instrumental in propelling Tencent’s results and propping up its status as one of China’s two largest corporations, the other being fellow internet giant Alibaba Group Holding. Thomas Chong, an analyst at BOC International, estimates that Honour of Kings will contribute more than 50 per cent of Tencent’s smartphone game revenue this year, and that it recorded monthly gross revenue of as much as $441 million in April alone.

The company has already unveiled different overseas versions for Honour of Kings, for instance in Hong Kong via Sea Ltd’s Garena. In Turkey, the game has been ranked among the top 10 highest-grossing apps in past weeks, according to App Annie. It’s also distributed in Thailand, South Korea and Taiwan.

Expanding its corps of foreign players may also help cushion the impact of potential local crackdowns. The company has been trying to tame the crisis ignited by an editorial in the People’s Daily, creating a system to protect juveniles from addiction. It’s also pledged to limit playing time for Chinese users below the age of 18.

Bloomberg