Chinese tech giant Tencent is reportedly in talks to merge China’s two biggest video game live-streaming platforms, Douyu and Huya, into an online games giant with a combined 300 millions users and market value of around $10bn.
Tencent, which currently owns a 38% stake in Douyu and 37% in Huya, is aiming to become the largest shareholder in the combined entity, according to a Bloomberg report.
Douyu and Huya would keep their respective branding and platforms, while working more closely with Tencent’s esports site eGame. The combined entity would have scale and profitability akin to Amazon’s game live-streaming giant Twitch.
The move comes as Tencent is facing more competition for advertising revenues on home turf, especially from ByteDance and its stable of apps, as well as growing resistance to Chinese apps overseas.
India has recently banned dozens of Chinese apps, including ByteDance’s TikTok, Alibaba’s UC Browser and Xiaomi’s Mi Community. Meanwhile, Microsoft is exploring an acquisition of TikTok in the US as concerns grow over the influence of the Chinese-owned short video platform.
Huya is currently listed on the New York Stock Exchange, and Douyu on the Nasdaq, but analysts believe it’s likely a combined entity would exit US stock markets due to the growing trade and political hostility between the US and China.
China’s game-streaming market is set to generate $3.4bn (RMB23.6bn) in revenues this year, according to iResearch. Douyu and Huya are by far the top two platforms in terms of market share, with competitors including Bilibili and NetEase’s CC Live.