Tencent Takes Arena of Valor Into New Arenas in Latest Overseas Foray

China's Tencent Holdings will launch its 'Arena of Valor' mobile game in Russia and the Middle East on Thursday, capitalising on a global spike in online gaming as coronavirus lockdowns keep billions of people stuck at home.

Tencent's move marks the Chinese social media and gaming giant's latest effort to derive half of its games revenue from overseas. The proportion more than doubled in the fourth quarter, accounting for around 23 percent of its online game sales.

Arena of Valor, a multi-player role-playing game in which players hack and slash their way through battle arenas, will be available in 149 countries and regions following Thursday's launch, which also includes North Africa.

"We want to capitalize on our advantage in mobile gaming development and work with our partners to really lead the way with our mobile games," said Vincent Gao, international business director of TiMi Studios, Tencent's biggest game studio.

While Western gamers tend to prefer desktops or consoles for more sophisticated play, demand for mobile games is growing steadily as powerful top-end smartphones become more accessible.

Tencent said last year it would bring the world's most popular desktop game League of Legends to mobile, work with The Pokemon Co on a new mobile game and also launched Call of Duty Mobile in partnership with Activision.

The success in new markets of Arena of Valor, the international version of Honour of Kings which has been one of Tencent's top grossing games for years, is crucial for its international drive as the game has not reached critical mass in the US and Europe since its launch in 2017.

It has gained a strong foothold in Southeast Asia and Tencent said it was seeing consistent month-on-month growth in daily play numbers. It declined to disclose daily active user numbers, but said the game has 200 million registrations.

Tencent is now more conscious of local sensibilities and creating region-specific content by allowing regional managers to add in-game content to appeal to local audiences, said Gao.

He also said Tencent is actively looking for new leadership and talent in North America with a goal of creating a studio that produces "original IP that has global appeal."

"Right now we have a team working on our global business in North America and are planning to expand it into a full development studio that helps us understand global players and to develop a stronger global perspective," he said.

Analysts say emerging markets like Russia and the Middle East might offer more potential to Tencent, as several Chinese game companies have made inroads there and performed well.

© Thomson Reuters 2020