Tencent Holdings Ltd. announced on Thursday that it would shut down its Penguin Esports by June 07.
The platform has already stopped taking new users or live-streaming hosts. It had also blocked existing users from topping up their accounts with immediate effect.
The world’s largest video games company explained that the move comes as it streamlines its businesses following a regulatory crackdown.
Like Amazon’s Twitch, Tencent’s Penguin Esports hosts live streams of professional gaming tournaments.
The six-year-old platform is an aggressive push into the area for a potential new revenue stream.
Correspondingly, the latest decision is a blow to the ambitions of the Chinese giant. However, the game streaming service never achieved a substantial market share in China.
Nevertheless, the tech company already owns the country’s two largest game streaming platforms, Douyu and Huya, through previous acquisitions.
Together, the two services commanded over 70.00% of the game streaming market in the world’s second-largest economy.
In addition, the announcement comes months after Chinese regulators blocked Tencent’s key merger of Douyu and Huya on antitrust grounds.
Subsequently, Huya also mentioned that it planned to merge Penguin Esports into the new entity.
That would have turned the $10.00 billion tech giant into one of the world’s most prominent game streaming players.
In recent months, other products of Tencent have withdrawn, including its e-commerce platform Xiao’e Pinpin in February.
At the same time, it halted services for video games, including Epic Games’ smash-hit Fortnite.
Accordingly, a wide-ranging Beijing regulatory crackdown has targeted tech giants over the last year.
The prolonged scrutiny forced them to revamp once common market practices. It also drove Tencent and peer Alibaba Group to draw up layoffs plans.
On Friday, Hong Kong-listed shares of the gaming giant slashed 1.55% or 0.74 points to $47.03 per share.
Tencent trims compensation for CEO Ma
Furthermore, Tencent slashed the compensation of Chief Executive Pony Ma for a year due to China’s crackdown.
Eventually, Ma took home a total of $6.93 million in 2021, down 25.00% from the year before.
Still, the billionaire founder holds more than 7.00% of the firm. This gives him a net worth of about $39.00 billion.
Nevertheless, the company doled out more than $200.00 million apiece to two unidentified executives in 2021.
In its annual report, the two individuals made $204.00 million and $203.00 million respectively.
Correspondingly, that would put the pair among the 20 most highly paid executives in the United States. It is a roster led by Tesla founder Elon Musk and Apple CEO Tim Cook.
