Tencent shuts down Penguin Esports, its rival to Amazon’s Twitch, as China’s crackdown on tech carries on

The streaming platform, Penguin Esports, declared Thursday that it would terminate all products and services on June 7, citing variations in “small business progress method.” Just 9 months in the past, anti-belief regulators prevented Tencent merging the business with its other pursuits in dwell streaming.

Penguin Esports was recognized by Tencent in 2016 and is identical to Amazon (AMZN)‘s Twitch assistance. It owns streaming legal rights to quite a few of Tencent’s hit games in the region, these kinds of as Honor of Kings and League of Legends, as properly as esports competitions.
But Penguin Esports has not occur close to turning into a dominant market player. Nasdaq-detailed Huya (HUYA) and Douyu (DOYU) are currently top China’s movie activity streaming wars, accounting for a lot more than 70% of the current market, in accordance to the country’s antitrust regulator. Tencent also owns a big stake in Huya and Douyu independently.

In 2020, Tencent planned to market Penguin Esports to Douyu for $500 million, and then merge Douyu and Huya into a new enterprise that would streamline its shares in the platforms. The offer was valued at just about $6 billion dependent on each firm’s stock charges at the time.

But the merger offer was blocked. The Point out Administration of Marketplace Regulation said in a assertion in July that Douyu and Huya’s merger would improve Tencent’s dominance in the movie sport streaming current market, supplying the business far too significantly market energy and most likely deterring reasonable levels of competition.
The termination of Penguin Esports arrived as an unparalleled federal government crackdown has sharply slowed earnings development at the country’s most effective world wide web corporations, pressuring them to lay off staff members and seem for approaches to cut down running charges. Due to the fact late 2020, Chinese authorities have introduced a sweeping marketing campaign in an work to rein in large players in industries ranging from tech and finance to gaming, leisure and personal schooling.
Very last thirty day period, Tencent described its slowest revenue expansion because its listing in 2004.

The shutdown of the video clip video game streaming assistance also will come amid an intensifying crackdown on tax evasion in the country’s booming dwell streaming sector.

Past thirty day period, the State Taxation Administration said it will begin demanding on the internet platforms to report stay streamers’ particular facts and incomes every six months.

Authorities have previously focused some livestreaming stars for tax evasion, these kinds of as online superstar Viya, who was fined 1.34 billion yuan ($211 million) in December for concealing personal income.
Tencent’s co-founder Pony Ma and president Martin Lau stated in an earnings get in touch with in March that the new laws have led to “fundamental alterations and problems” in the internet market, hitting Tencent’s money overall performance.

The firm would “proactively embrace variations” to much better align with a new business paradigm, Lau said.

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‘I am not gonna die on the internet for you!’: how game streaming went from dream job to a burnout nightmare | Twitch

It is June 2018, and I am sitting at a table in a needlessly fancy restaurant in LA with a bunch of teenagers. Well, some of them must be over 21 as they are able to order alcohol, but most are sticking to Coke or sparkling water with their overpriced steaks. These are some of the up-and-coming stars of Twitch, the livestreaming platform that now broadcasts about 2bn hours per month from more than 9m channels, most of which involve people filming themselves and chatting while playing video games. Later, there will be a lavish party in a similarly extravagant club, where the streamers with the most views and subscribers will be treated like celebrities in the VIP area.

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And, well, they are celebrities. They have millions of followers. They are stopped in the street or at airports by people wanting a selfie and an autograph. Unlike pro gamers, whose job is to be good enough at video games to win tournaments, a streamer’s job is to be entertaining enough – while playing anything from first person shooters to racing games – to win fans. Back in 2018, streaming was already a huge deal; now, bolstered by the pandemic and an ever-growing audience that boosted Twitch’s viewership by 70% in 2020, it is even bigger. To draw a comparison that makes me feel about 4,000 years old, they are their generation’s rock stars.

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Unlike rock stars, however, streamers are not really known for hard partying. Talking to the people around that table, I was instead astonished – and, honestly, worried – by how hard they worked. The woman sitting next to me told me that she streams for eight to 10 hours every day, and when she wasn’t live she was curating her social media, responding to fans, scouting for brand partnerships or collaborations with other streamers; throughout our conversation she was visibly resisting the impulse to check her phone, where new stats and fan comments and potential opportunities were presumably stacking up. I asked what she does for fun and she seemed genuinely confused by the question.

Playing video games for an audience for a living sounds like fun – and hell, there are many worse jobs out there – but it is also an ultra-competitive profession that attracts millions of aspiring kids with limitless energy and absolutely no concept of work-life balance. It involves extreme hours and intense pressure to be constantly available to the audience of viewers on whom they depend. And according to recently leaked Twitch data, the top 1% of streamers on its platform received more than half of the $889m (£660m) it

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