Bloomberg reported that Tencent is planning to consolidate Huya and Douyu, these are the two biggest gaming-focused live streaming platforms in China. According to Chinese media outlet, the proposal of merging has been raised to the level of the company’s general office. If the company moves fast enough within the year, they can seal the deal. Tencent is already Huya’s biggest shareholder and also owns over a third of Douyu.
Reuters reported familiar news regarding Tencent seeking full control or at least become the biggest shareholder of the merged entity. If the deal signs off, it would create an online game streaming giant with more than 300 million users and a combined market value of $10 billion, further solidifying Tencent’s lead in Chinese games and social media.
According to data from MobTech, the combined entity will take up to 80% of the market. The source also said that a merger could also involve eGame, Tencent’s own streaming site and ranked No. 4 in the country. The potential merger will significantly lowered the cost of competition in the game live-streaming industry, while giving the new platform an edge in competition with Bilibili, a YouTube like video platform that is also marching into the esports realm.
Both Douyu and Huya have not responded in regards to the issue. Douyu’s shares surged 18% in pre-market trade in New York, while Huya soared 15%. Tencent climbed 2% to a two-week high in Hong Kong.
NetEase News cited a source with direct knowledge of the matter that “To Tencent, Huya is a pawn, Douyu is a friend, while Kuaishou and Bilibili are opponents.” The source also said that there is a high chance that Douyu and Huya will be able to keep their independent operation team after the consolidation.
Mitchell Landsberg is the senior reporter for News Raise and focuses on Technology. Mitchell regularly writes about social media platforms and how influencers, industry and general people use them to communicate and make money.