Tencent Games’s success: analysis through Honor of Kings.

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ARIN2610 assignment3 Critical internet analysis

 

(video: A English test server game play video of Honor of Kings)

 

1.Introduction: What is the company or entity you have chosen to analyse, and why has it had a transformative effect on our use or understanding of the internet and our economic, political, social or cultural worlds?

To analysis the Chinese internet environment, few most important terms that would come into people’s mind is: WeChat, QQ. It is obvious that almost every Chinese that uses a cell phone uses these social media services. To think about the most popular games in China, “League of Legends” (Chinese server), “Honor of Kings” will come to most Chinese game player’s minds. The service provider of all of these services is: Tencent. Tencent’s business scope is way too wide that it can be seen as a social networking/ social media service provider, a games developer, etc. This essay would mainly focus on Honor of Kings, which is Tencent’s most successful game product as an example, to analyze Tencent as a game producer. Introduce and situate the entity of Tencent corporation historically, politically, economically, and culturally. Analysis of its effect on the internet ecosystem, and come out with the result that how Tencent’s game product, service become a part of internet transformative. How Tencent’s game product changes the way people play games.

2.What type of an entity is it, what is the history of its development and how has it come to have such a transformative effective?

Tencent’s game business makes it can be considered as a game developer. To analysis the birth of Tencent, it comes with China’s economic reform policy. During the capitalist economic development process in China from 1994 to 2000 “Internet was embedded in the country’s capitalist development and global reinsertion through industrialization and informatization. Both as an enabling condition and an outcome, priority was given to building the information network and industry in coastal and urban areas” (Tang 2020) Which means during that period, the government would give support to the development of internet companies, also encourages building industry in coastal/ urban cities. Tencent has seized the historical opportunity, and starts to run its business in Shenzhen (A coastal and urban city!) It can be seen as the Government’s policy, industry development, and investment from the investor (Tang 2020) encourages Tencent to prepare, and gives birth to Tencent in 1998. Tencent successfully expands its business for the next few decades.

Two reasons why Tencent’s had become so successful very quickly and comes to have such a transformative effective is: First, Tencent’s mobile product helps Tencent games seizes the opportunity of “the mobile internet emerging markets, especially for the Asia Pacific.” (Simon, 2018) Also, Tencent’s game product actually reacts very well with social media/ platforms Tencent already has. To use Honor of Kings as an example: The game releases on November 26th, 2015, and quickly became popular in China. Increases a huge amount of income for Tencent corporation until now. Honor of Kings has two servers: QQ server and WeChat server. This brings a few advantages for Honor of Kings to composite with other mobile games. Firstly, users could simply use their preexisting QQ or WeChat account to sign in to the game. It easily attracts and encourages new users to join in the game, due to the fact that it was very easy to sign in. Also, according to Wei H’s academic study towards game loyalty, different game users, might try to gather to play the game together, and build an online community. That process helps to increase loyalty towards the game. (Wei, 2017) This process can be analyzed as: if Tencent’s game users build an online community by themselves successfully, Tencent will lose fewer game users. However, it is way too easy for Tencent’s game users to build a community online, because users can simply add other players on QQ or WeChat inside the game and keep in touch. 

In his study, Frangville mentions that in order to capture the nature of youth people’s cultures and collective spaces in cyberspace, the distinction between “form” and “content” was the key point. (Frangville 2019) Tencent absolutely gives their young users a game content of the discussion and keeps the forms of discussion still be a part of their business. These facts change how people play games, and also change people’s view between games and social media. It can be seen as the first-time games were connected with social media that closely. Tencent successfully reserves its users, and keep expanding their game business.

3.Who owns it and what is its business model?

Tencent is the absolute business controller, Timi studio, a subsidiary of Tencent games, runs the business of Honor of Kings.

The business model of Tencent’s game is usually: Tencent provides game content, and their users pay for it. (PR Newswire, 2020) This business model works successfully. In Sep 2015, Smith Greg mentions in “The Australian Financial Review” that Tencent Game’s “free cash flows were more than 5 billion yuan. Net cash on hand at June 30 was about 21 billion yuan.” (Smith 2015) That is Tencent’s financial statement, even before “Honor of Kings” comes out.

Come back to the example of: Honor of Kings. It was a self-developed game by Tencent’s Timi Game Studio, and it can be seen as a mobile version of League of Legends. In 2018, it owns 200 million users in China (PR Newswire, 2018). That leads to another part of the business model discussion: Honor of Kings also encourages users to share pictures and videos related to the game on QQ/ WeChat or other social media. One of the most direct examples is the screen recording function provided by WeiSee (It is also a video editing/posting service owned by Tencent). Once the user chooses to use the screen recording function in the setting sections Honor of Kings, WeSee will automatically record everything on the user’s screen when they are playing the game. After every game was finished, WeSee will atomically produce videos that include all of the highlight moments in the game that the player just played, and automatically adding a special visual/ sound effect for the video. It makes it way too convenient for the user to share. Almost no more editing was required from the user, in order to share the video.

 

(Figure: A game video that automatically produced by WeSee. Screenshotted by Tianjian Xu)

In the sharing process, financial values were created by every user for the Tencent company. Consider the “sharing economic” ideology (Join 2018) It actually creates a new business model for Chinese mobile game, because the user experience of Honor of Kings was improved positively by the connection between the game and social platforms that already exist. Users of QQ/ WeChat was encouraged to play Honor of Kings, while users of Honor of Kings were encouraged to use QQ/ Wechat. In this process QQ/ WeChat and Honor of Kings are acting as each other’s free advertisement, attracting more potential users for each other.

4.What is its place in its industry or social ecology? Does it work with partners? Does it have competitors? Who supplies it with goods or services? Who regulates it? Who uses it?

A famous Japanese game company SNK is the partner of Tencent games, they have partnership that Tencent could use game characters SNK designed in their games. (PR Newswire 2020) NetEase is Tencent’s main competitor because NetEase Games actually runs many popular games like Hearthstone (Chinese server).

Tencent’s game business encourages the Chinese government’s regulation towards the game to happen. In 2017 China’s state-run newspaper People’s Daily came down hard on Tencent, and criticized “When making money and hurting people coexist, we need to be more alarmed” (Abkowitz 2017) It can be seen as a warning for Honor of Kings, because since the beginning of its born, Honor of Kings has become a phenomenal mobile game for even the whole Chinese society. Users of different ages would attract to it, especially young children and teenagers. So, in response, Tencent posted their new policy, a one-hour playing time limit and a log-in ban from 9 p.m. to 8 a.m was applied for users under 12 years old. (Dow Jones Institutional News 2018) 

Also, in 2017, the Chinese Communist party criticized Honor of King for its loose adaptations of history. CCP suggests some of the characters Honor of King have “were both misleading for the game’s younger players and disrespectful of China’s past.” (Liboriussen 2020) This is a true fact, because Honor of King has a female version character of a male assassin in history. That leads to another regulation towards game culture. These instances actually can be analyzed as: the growth of Honor of Kingsand Tencent’s game business has promoted the Chinese government to establish new policy towards internet game/ game culture regulations. 

5.Draw a diagram that shows these actors in relation to each other. Use Word Smart Art (you will find this under the Insert menu) to create a flowchart or other diagram.

6.How is this entity transformed our use or understanding of the internet? How is it innovative?

  • Has it changed the way people relate socially and/or politically?
  • Did it introduce a new type of business model online?
  • Has it been used to mobilise social or cultural change?
  • Has it triggered new regulatory processes?

Honor of Kings has it’s cultural impact in Chinese society, because it brings the topic of discussion for their users. While the user plays the game, they would know which of their QQ/ WeChat friends also plays this game. Also, they would also directly know their friend’s game information, including ranking level, which characters they play, the ranking level they placed in their city, their province, or even the whole Chinese server. Users would naturally compare the ranking levels between themselves and other users. That encourages them to keep playing this game to achieve a higher ranking. This makes Honor of Kings also become a part of internet transformative that changes Chinese people’s social gathering. Because the game was so influential, even strangers would easily use this game as an icebreaker in events like a party.

(Figure: an example of a user’s homepage inside the game. This page directly shows this user’s ranking of the character Pangu places 93rd in Hubei province. Screenshotted by Tianjian Xu)

Also, Honor of Kings challenges the gender stereotype that exists in Chinese and even the global society. In the past, video games were mainly considered as: male’s business. (Chen, Liu, Zeng, Xu, Zhu, Sharma, Zhao 2018) In her study, Vermeulen Lotte points out that “Many studies indicate a pattern in which women are discouraged by violent and competitive gaming environments while men seem to embrace such game-play mechanics” (Vermeulen 2016) However, Honor of Kings attracts a huge number of female users. The game itself is very competitive, requires a lot of attention and practice in order to play it well. But female users still play this game for sure. Some of them might first be attracted by its beautiful character design, but then they turn to play these characters in competitive ways.

(Figure: examples of Honor of King’s female character design. Screenshotted by Tianjian Xu)

7.Summary

Overall, as a games developer, Tencent uses its product to become a part of the internet transformative. Tencent’s game product connects the game with the social media service Tencent contains previously, improves the way user’s relationship between games and social media. During this process, the online community was formed by users, commercial values (sharing economics), and a new business model was created. The growth of Tencent’s game product also creates a gaming culture between their users, breaks the gender stereotype that exists in Chinese society, and encourages the government to have a new regulation policy. Game is the bread of Tencent’s financial income and the butter or Tencent’s cultural influence towards society.

Reference

Tang, M. (2020). Tencent : the political economy of China’s surging internet giant . Routledge.

Frangville, V., & Gaffric, G. (2019). China’s Youth Cultures and Collective Spaces Creativity, Sociality, Identity and Resistance. Routledge.

Wei, H. (2017). Be loyal but not addicted: Effect of online game social migration on game loyalty and addiction.(Report). Journal of Consumer Behaviour16(4), 343–351. https://doi.org/10.1002/cb.1637

Vermeulen, L. (2016). “I Play So I Am?” A Gender Study into Stereotype Perception and Genre Choice of Digital Game Players. Journal of Broadcasting & Electronic Media60(2), 286–304. https://doi.org/10.1080/08838151.2016.1164169

John, N. A. (2018). Sharing Economies. In The age of sharing (pp. 69–97). Polity.

Liboriussen, B. (2020). Honour of Kings as Chinese popular heritage: Contesting authorized history in a mobile game. China Information, 34(3), 319–341. https://doi.org/10.1177/0920203X20908120

Simon, J. P. (2018). Triggering the emergence of digital ecosystems: The role of mobile and video games in emerging economies. Digital Policy, Regulation and Governance, 20(5), 449-478. doi:http://dx.doi.org.ezproxy1.library.usyd.edu.au/10.1108/DPRG-03-2018-0008

Krippendorff, K. (2019). Driving Innovation from Within : A Guide for Internal Entrepreneurs . Columbia University Press,. https://doi.org/10.7312/krip18952

Newifi 3, first blockchain router in the world, accelerates tencent game king of glory. (2018, Jan 30). PR Newswire Retrieved from http://ezproxy.library.usyd.edu.au/login?url=https://www-proquest-com.ezproxy2.library.usyd.edu.au/docview/1992310742?accountid=14757

Smith, G. (2015, Sep 19). TENCENT: MARCO POLO. The Australian Financial Review Retrieved from http://ezproxy.library.usyd.edu.au/login?url=https://www-proquest-com.ezproxy2.library.usyd.edu.au/docview/1744636125?accountid=14757

TiMi studios and SNK announce a new metal slug game for mobile at tencent games annual conference. (2020, Jun 27). PR Newswire Retrieved from http://ezproxy.library.usyd.edu.au/login?url=https://www-proquest-com.ezproxy1.library.usyd.edu.au/docview/2417781652?accountid=14757

Tencent posts solid earnings, but china’s game freeze clouds future — update. (2018, Nov 14). Dow Jones Institutional News Retrieved from http://ezproxy.library.usyd.edu.au/login?url=https://www-proquest-com.ezproxy2.library.usyd.edu.au/docview/2133207630?accountid=14757

Abkowitz, A. (2017, July 5). Tencent Curbs Playing Time for Game — As state media rails against addiction, young “Honor of Kings” fans face restrictions. Wall Street Journal, B.4. http://search.proquest.com/docview/1915746111/

https://www.youtube.com/watch?v=-u1qUkgBKm8 (Source: Gaming Mobile,Honor of Kings | King of Glory | English Version | MOBA Gameplay (Android/IOS), from January 1st, 2020, standard YouTube Licence)

Tianjian Xu
About Tianjian Xu 3 Articles
Hi This is Chris Tianjian Xu, Im in my second year. Doing digital cultures (as my major) and film studies. The reason why I enrolled in this unit of study is because I would like to develop more about my critical thinking skills, it helps me to view the world from multiple different aspects.