what-does-tencent-own

What Does Tencent Own? Inside The Tencent Business Model

Tencent is a Chinese multinational conglomerate founded in 1998 by Ma Huateng, Zhang Zhidong, and Xu Chenye. Among its various global subsidiaries are companies in the online services, music, and artificial intelligence industries. But it is perhaps best known for its interest in the video game sector – both as a game developer for the Chinese market and the acquirer of several established gaming companies. Tencent is a vast company with a stake in more than 600 companies. Following is a look at some of the companies and subsidiaries it has a majority stake in.

Tencent Games

Tencent Games is the video game publishing division of Tencent Interactive Entertainment.

The Tencent division operates game development studios in China and the United States. It produces mostly mobile and browser-friendly games for the Chinese marketplace.

Tencent launched its own gaming platform called WeGame in 2017, allowing gamers to host global games and get access to purchases, downloads, live streaming, and community services.

Established game developers

Tencent has also acquired several game developers over the years. In 2015, it gained total ownership over Riot Games – developer of League of Legends.

The company also has majority ownership of Funcom (100%), Leyou (100%), Sharkmob (100%), Supercell (84%), and Grinding Gear Games (80%).

Epic Games – the creator of Fortnite – is also 40% owned by Tencent.

who-owns-fortnite
Epic Games owns Fortnite; Tim Sweeney, co-founder, and CEO is the major shareholder, with more than 50% of the company. And Tencent with a stake of over 40% of the company. Epic Games develops, publishes, and distributes games. It comprises the Unreal Engine, making money through licensing agreements with developers and creators. While Fortnite primarily follows a free-to-play model with up-sells and digital in-app purchases.
epic-games-business-model
Epic Games is a gaming company, that develops, publishes, and distributes games. It comprises the Unreal Engine, making money through licensing agreements with developers and creators. Its games (like Fortnite) mostly follow a free-to-play model on PC and an in-app purchase model on the digital marketplace. And its storefront Epic Games Store, taking a 12% cut on games’ sales.

WeChat

how-does-wechat-make-money
WeChat is a “super app” or an app that can do many things, from messaging to mobile payments and social media. Developed by Tencent, WeChat is among the most popular Super Apps in China. WeChat makes money via value-added services (with services like Moments, Public Accounts, and Gaming), advertising, and payments on the transaction processed through it.

WeChat is a multi-purpose messaging, mobile payment, and social media app developed by the company in 2011. Seven years after its release, it became the largest standalone app in the world by total users.

WeChat also offers an extensive digital payment service in line with Chinese government initiatives to support eCommerce development in the country.

Tencent Music Entertainment

The primary function of Tencent Music Entertainment (TME) is the creation of music streaming services specifically for the Chinese market.

In collaboration with Swedish audio streaming service Spotify, TME has created several apps including Kugou, Kuwo, WeSing, QQ Music, and Ultimate Music. Collectively, these apps represent 800 million active users, 15% of which are subscribed to a paid plan.

Tencent Video

Tencent Video is a Chinese video streaming website. The website is complemented by WeTV, the international version of Tencent Video.

It also offers a video-on-demand service and supports television broadcasts by providing video volume amplification, color quality management, and other functional services.

In terms of the content itself, Tencent has a strategic focus on original content in the form of micro movies and homemade dramas. It also offers short-film contests and support plans.

Tencent Pictures

Tencent Pictures is the film production and distribution arm of Tencent. Through subsidiary Tencent Penguin Pictures, the company has a focus on online content and feature film investment.

Tencent Pictures has been involved in several notable films, including Men In Black: International and the upcoming Top Gun sequel.

Key takeaways

  • Tencent is a vast Chinese conglomerate founded in 1998. It has a stake in over 600 companies.
  • Tencent is perhaps best known for video gaming. It owns and operates a gaming production facility to develop games for the Chinese market. It also has majority ownership of established game developers responsible for titles such as Fortnite and League of Legends.
  • Tencent also owns the instant messaging app WeChat and has a significant investment in the production of movies, short films, and dramas for Chinese and international markets.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"