Wherever I go in China, I see people playing the same game on their phones. Be it security guards, couples over lunch, or kids on the street. While I am zero into mobile gaming, the popularity of this game really blew my mind.
The game is called Honour of Kings and was released by Chinese internet giant Tencent (it’s the same company that runs the social messaging app WeChat which has a staggering 902M daily active users).
Now the game itself has pretty remarkable stats, too: there are 80M daily (!) active users (that’s about 6% of the Chinese population) who play the game an average of six hours a week – with $1.76B of revenue in Q1 of 2018, basically making it the world’s number one mobile game.
The game became so addictively popular, that a Chinese newspaper called it “poison for young people” – which triggered a market cap loss of $14B. Tencent later reacted to the criticism by 1) imposing a daily cap of one hour for kids under 12 and by 2) announcing a lineup of “serious” video games with “positive social value” (traditional culture, and engineering exercises, parent-child interaction, etc.).
Interestingly enough, Tencent recently overtook Facebook as the most valuable Social Networking Company with a market cap of $540B. The kicker in the comparison to Facebook however is the fact that only 18% of Tencent’s revenue comes from advertising, compared to 98% for Facebook. Tencent has plenty of profitable revenue streams, especially at the intersection of gaming and subscriptions. Which only means that there is a lot of revenue upside once it decides to tap more into advertising (WeChat currently shows only one single ad per day in your feed).
The scale of these tech trends in China and the way how they have shaped society is really fascinating.