Tencent, China’s largest game developer by revenue, announced that it is removing its popular mobile game “Dungeon & Fighter” (DnF Mobile) from certain Android app stores starting Thursday.
This decision comes as the company’s contracts with these app stores have expired, highlighting ongoing tensions between game developers and distributors over revenue sharing in the burgeoning mobile game market.
Revenue sharing disputes in the gaming industry
The removal of DnF Mobile underscores a persistent issue in China’s gaming industry: the contentious relationship between game developers and app store distributors.
As mobile games continue to gain popularity, the standard revenue share split, often 50%, has become a significant point of dispute.
Game developers argue that this split does not adequately reflect their investment and effort in creating and maintaining games, while distributors claim their share is justified by the platform and marketing support they provide.
In this case, Tencent did not specify which app stores are affected by the removal of DnF Mobile. However, reports from the 21st Century Business Herald suggest that app stores operated by major smartphone manufacturers Huawei, Oppo, and Vivo are among those impacted.
This move mirrors a similar incident in 2021 when Tencent’s games were removed from Huawei’s app store over a revenue-sharing disagreement.
Impact on players and the market
The removal of DnF Mobile from select app stores is likely to impact a significant number of players who access the game through these platforms.
While the game remains available on other platforms, the disruption may lead to frustration among users and could potentially affect Tencent’s revenue from one of its hit games.
The exact financial impact on Tencent remains to be seen, but it highlights the complexities and challenges of maintaining partnerships in a rapidly evolving digital marketplace.
For players, the removal means they will need to find alternative ways to access the game, such as downloading it from other app stores or directly from Tencent.
This inconvenience underscores the broader issue of platform dependency in the mobile gaming industry, where the distribution channels play a critical role in accessibility and user experience.
What does this mean for the gaming industry?
The dispute between Tencent and the Android app stores is not an isolated incident but rather part of a larger trend in the gaming industry.
As mobile gaming continues to grow, generating substantial revenues, the stakes for revenue sharing agreements become higher.
Developers like Tencent, which invest heavily in game development and updates, seek a larger share of the profits to justify their expenditures and drive further innovation.
On the other hand, app store operators argue that their share of the revenue is essential to maintain the platform, provide marketing support, and ensure a seamless user experience.
This ongoing tug-of-war could lead to more frequent disruptions and necessitate new approaches to revenue sharing and contract negotiations.
The situation also highlights the increasing influence of major tech companies like Huawei, Oppo, and Vivo in the gaming market.
These companies, which dominate the smartphone market in China, have significant leverage over app developers, further complicating the dynamics of revenue sharing agreements.
Possible resolutions and future trends
The resolution of this dispute will likely set a precedent for future negotiations between game developers and distributors.
Potential solutions could involve more flexible revenue sharing models, longer contract terms, or enhanced collaboration to ensure mutual benefits.
As the gaming market continues to expand, both parties will need to find a sustainable way to balance interests and foster growth.
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