Market Insight

Mainland China: Tencent closes popular poker game to comply with regulations

September 11, 2018

Chenyu Cui Chenyu Cui Senior Research Analyst – Games, IHS Markit

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Tencent announced it will shut down its Everyday Texas Hold’em poker game on September 25 and start to issue refunds to players or convert the in-game currency to other Tencent games. The title is not a gambling title but allows to play poker using in game currency. The company’s spokesperson suggested that the move was aimed at diverting more resources to other games in its pipeline rather than a response to the intensifying government policy on online games industry.

Everyday Texas Hold’em had its initial launch in 2012 but still ranks within the top 50 grossing apps on iOS App Store’s card game category. Over the years it has become a pillar of Tencent’s web board and card game portfolio with a substantial revenue contribution and stable userbase. Poker games have become an investment focus for the Chinese online gaming industry since early 2018 and generate high profit margins, so this move casts a shadow on Tencent’s web board and card games business and this genre of game as a whole.

Chinese regulators are starting to keep a close eye on the online gaming industry whose negative impact on youth has sparked great social discussion and complaint from parents. In recent months there has been a freeze on issuing publication numbers for new games and poker games have been unable to be promoted on social media. Major publishers need to check their existing portfolios to meet stringent regulation and government censorship while mid-tier and smaller companies are facing challenges of launching new games.

It’s not surprising to see strict measures taken to limit poker games as they are closely associated with gambling and somtimes the conversion of virtual currency into real money, which the government is cracking down on. We consider this to be only the start for these types of games and stricter policies for regulating the whole online gaming industry and gamers’ behavior is on the way.

Geography
China
Organization
Tencent
Research by Market
Media & Advertising
Category
Games
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