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An Analysis of Tencent’s Success in the Gaming Business: Focusing on its “Toll-Keeper” Strategy

  • The Journal of Study on Language and Culture of Korea and China
  • Abbr : JSLCKC
  • 2023, (67), pp.389-413
  • DOI : 10.16874/jslckc.2023..67.014
  • Publisher : Korean Society of Study on Chinese Languge and Culture
  • Research Area : Humanities > Chinese Language and Literature
  • Received : January 10, 2023
  • Accepted : February 20, 2023
  • Published : February 28, 2023

Eunyeong Kim 1

1인하대학교

Accredited

ABSTRACT

Tencent, which entered the game industry in 2003, has grown to become the world’s largest online game company in just a decade. This paper analyzes Tencent’s success factors in connection with the paradigm shift from game development to game distribution and from PC games to mobile games, and attempts to draw lessons for Korean game companies. Tencent, which pursued growth through game distribution rather than game development early on, became China’s No. 1 game company establishing a unique cooperation model with global game companies amid difficulties in importing and publishing overseas games due to the Chinese government’s rigid game licensing system. With the paradigm shift to mobile internet, Tencent took the lead in converting PC Messenger (QQ) to mobile messenger (WeChat), effectively linking messenger accounts to mobile games, and using it as a kind of distribution channel. WeChat’s power and influence in China paved the way for Tencent to expand its distribution channels with Mini Program in spite of Apple’s strong checks. In addition, Tencent’s independent Android App Market (MyApp) has contributed to increasing the utilization of its payment methods such as WeChat Pay when making game-related payments. As such, Tencent was able to grow in a relatively short period of time by becoming a kind of “toll-keeper” on the Chinese game and app market frontiers. As the paradigm of the game industry is shifting from mobile games to multi/cross platform cloud games amid conflicts with Google and Apple over in-app payments and commission, Tencent’s “toll-keeper” strategy suggests that Korean game companies should actively seek a role as a new “toll-keeper” by developing game-specialized app markets and cloud-based app game platforms, besides remaining as game developers.

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* References for papers published after 2023 are currently being built.

This paper was written with support from the National Research Foundation of Korea.
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