Tencent Puts Its Hopes on Social Gaming
Tencent Holdings, one of the largest internet companies in China, is betting that competitiveness between friends playing mobile games will boost revenue from WeChat, a social messaging app that is used by over half of Chinese smartphone users.
The company has updated WeChat and hopes that the addition of games, paid-for emoticons and a mobile payment system will help generate revenue from its user base of over 300 million people.
It doesn’t cost to download and play WeChat’s “freemium” games such as Tiantian Ai Xiaochu.
Furthermore, the app’s social features encourage competition between players, by paying for in-game upgrades players will be able to gain a temporary advantage over their friends and Tencent will get its money.
However, the company needs more games and it is willing to invest heavily for them. Steve Gray, the executive in charge of game development at Tencent, said that “We’re going to buy into high-end game developers and start developing free-to-play content for developing markets.”
So far Tencent’s shares have risen about 48% this year, making it the best performer on the Hang Seng index. The company is currently valued around $88 billion.