Tencent feels heat from gaming rivals Alibaba, ByteDance and Genshin Impact maker miHoYo

Tencent saw record growth in gaming in 2020, investing in nearly 30 companies as PUBG Mobile and Honour of Kings pulled in more than US$5 billion

While Alibaba and ByteDance continue to push into gaming, miHoYo’s Genshin Impact became one of the hottest new titles without Tencent’s ecosystem

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Published: 6:30am, 11 Jan 2021Updated: 6:30am, 11 Jan 2021

Tencent Holdings, the world’s largest video games company by revenue, saw remarkable growth in 2020, but it now finds itself on the defensive, trying to tap into new gaming genres as large tech rivals and gaming upstarts chip away at its empire.

The Shenzhen-based company, which gets a third of its revenue from gaming, invested in 29 video game companies last year, three times more than in 2019. Tencent also pulled in more than US$2.6 billion from each of its two biggest mobile games, PUBG Mobile and Honour of Kings, a first for any gaming company, according to app tracking firm Sensor Tower.

However, some of the thunder for this historic run was stolen by Shanghai start-up miHoYo with the September launch of Genshin Impact, the biggest global launch ever for a Chinese game. Rivals Alibaba Group Holding and TikTok-owner ByteDance, companies not traditionally active in gaming, are also making forays into the industry traditionally dominated by Tencent and its long-standing rival NetEase, which is seeking an edge in cloud gaming with a new pact with Huawei Technologies Co.

Alibaba is the parent company of the South China Morning Post.