There has been a surge of demand for fun and new exciting video games to play at home as people comply with social distancing regulations amid the ongoing coronavirus pandemic. These rules have proven beneficial for some industries, with the video game industry seeing a boost in 2020 in particular, helped by total revenue from consumers.
TiMi Studios, owned by Tencent Games and responsible for titles such as Honor of Kings and Call of Duty Mobile, made the most out of 2020 and saw a huge profit as a result. According to a recent exclusive report by Reuters, insiders from the studio leaked that the company had made $10 billion alone in 2020.
If the leak about the $10 billion proves to be factual, this would make Tencent Game's TiMi Studios the world's largest video game developer. Not only that, but it gives the company an even bigger incentive to expand beyond mobile titles and move into the world of AAA titles for consoles and PC.
This newfound success for Tencent serves as no surprise to people who have been closely paying attention to the company. Many major studios turn to Tencent for help in adapting huge desktop or console games onto the mobile platform, or generally putting them out in China. The company already has plans put into motion, as according to a recruitment notice put out by a TiMi engineer, the company is planning to create a AAA title that is inspired by the virtual community from the movie Ready Player One. This is also partly to compete with other big companies in Japan, Korea, Europe, and the United States.
Tencent also has plans to build more studios overseas for the purpose of creating original content that can have a broader global appeal. This applies not just for TiMi Studios, but also Lightspeed and Quantum Studios, which are primarily located in the Los Angeles area. This expansion is also ideal for Tencent because the company aims to earn at least half of its game revenue from overseas companies, which was only around 23 percent in 2019 according to Reuters.
TiMi Studios alone accounts for about 40 percent of Tencent's total profits. However, with all of the other studios owned by Tencent being considered, Tencent made about 156.1 billion yuan, which converts to $23 billion in online game sales for 2020. While Tencent owns each individual studio, they all act independently and even compete with one another. The company will likely continue riding this momentum and keep getting bigger from here.
Source: Reuters