Tencent joins forces with ByteDance to challenge NetEase in gaming showdown

Tencent, one of China's leading tech firms, is making waves with its partnership with ByteDance, a former rival, to boost its latest video game release.

• The Game of Growth: Tencent recently launched "DreamStar," a mobile party game, aimed at rivaling "Eggy Party" from NetEase. With China's gaming industry showing signs of rejuvenation, DreamStar is predicted to generate up to 6 billion yuan ($842M) in its debut year.

• Advertising Allies: Despite a turbulent history, Tencent opted to advertise DreamStar heavily on ByteDance's online ad service Pangolin. Out of all the ads placed for DreamStar in the last 30 days, 38% were hosted on Pangolin, making it the primary platform for DreamStar promotion.

• In-House Promotion: Interestingly, Tencent, which has its own ad network, Youlianghui, only dedicated 12% of DreamStar's ads to its platform. This move forms part of Tencent's grand 1.4B yuan plan to develop the DreamStar ecosystem.

• Streaming Strategy: To promote DreamStar further, Tencent has allowed video game live-streamers to broadcast on ByteDance platforms.

• Past Feuds: The collaboration with ByteDance is a significant shift from the past when Tencent and ByteDance were engaged in multiple lawsuits over issues such as content sharing restrictions and copyright infringement.

This year, China's video games market saw a 13% increase in domestic revenue, amounting to 303 billion yuan. This growth is a welcome change, putting the Beijing-led industry crackdown two years ago behind and reflecting a bright future ahead for the Chinese gaming industry.