Tencent suspends blockbuster game within hour of China debut

(May 21): Tencent Holdings Ltd has suspended its highly anticipated proceedings Dungeon & Fighter Mobile within an hour of its Chinese debut on Tuesday, indicating strong initial demand for a blockbuster title that investors hope will boost sales growth in 2024.

Tencent, which had been preparing for the release for months, took the game offline for maintenance after what it called “server fluctuations,” without elaborating. The company compensated players with virtual coins and other in-game items while it worked to fix login issues. For some players, the game resumed after just over an hour, but not all features were available.

DnF Mobile, based on developer Nexon Co’s long-running franchise, is a key title for hit-hungry Tencent as the world’s largest games publisher replenishes its aging games portfolio. New game releases in China have been hampered by a prolonged freeze on game license approvals, and Tencent plans to increase releases throughout the year. Gaming revenue is estimated to grow double-digit this quarter after a long period of decline, driven in part by the new role-playing game.

Shares of Tencent fell about 2.6% before the midday break, but were below their morning low.

Analysts at Bloomberg Intelligence said: “The server outage on the release day of Tencent’s highly anticipated new game.” DnF Mobile is a potential sign of strong demand for the title. The disruption is unlikely to have a material impact on the results. The recovery in Tencent’s domestic gaming revenue in the first quarter gave confidence that the recovery of China’s video game business can continue until the end of 2024, albeit at a more moderate pace than in recent years. We expect China’s video game market to grow 6% in 2024, compared to 13.9% in 2023.”

DnF Mobile The game quickly rose to the top spot as the most downloaded free game on the iPhone App Store in China, and the title had already garnered over 60 million player registrations across all platforms before its release.

Tencent had previously tried to bring the game to China in 2020, but that coincided with the height of regulatory action in Beijing that imposed new rules on internet companies. Nexon said at the time it was delaying the title to comply with restrictions aimed at curbing addiction among minors.

Chinese regulators granted DnF Mobile a commercial license in February and Tencent executives said they accelerated the rollout after seeing positive test results.