China’s two most popular mobile games, Honor of Kings (HoK) and Game for Peace (GFP), both produced by gaming powerhouse Tencent, are losing long-term fans and newcomers to short video apps, research company Aurora Mobile’s latest report revealed last week.
With up to a third of lost users moving to apps like Douyin and Kuaishou, the report begs the question of whether Tencent can keep up in its competition with ByteDance, which backs Douyin, the country’s most popular short video app.
HoK and GFP have seen 30% and 29.2% of former players, respectively, switch to short video apps, the most popular alternatives to the two games. However, former users also cite “work and family life” and “other games” among other alternatives.
As of June 2019, 648 million people (or over three-thirds of Chinese internet users) watch short videos online, as reported earlier by KrASIA, while mobile games collected 691 million monthly active users (MAU) in the same period.
Douyin currently leads the short video segment with 376 million MAU, while Tencent staked its position in the category by investing in Kuaishou, accelerating its competition with Bytedance.
Conversely, Bytedance has also begun development in the mobile games segment, and is reportedly working on small mini-games as well as large-scale role-playing games.
Despite HoK’s and GFP’s lost users, the two games remain Chinese mobile gamers’ favorites. HoK, Tencent’s blockbuster multiplayer online battle arena (MOBA), is the most lucrative game—mobile, PC, console or otherwise—in the world, according to app store intelligence firm Sensor Tower. GFP, Tencent’s Chinese mobile version of the 2017 sensation PUBG (short for Playerunknown’s Battleground), ranks second in China by penetration rate.
According to the Aurora Mobile report, HoK has a monthly churn rate of 11%, while GFP has a higher rate at 15.8%. The churn rate refers to the percentage of users who do not return to an app or game during a given period—in this case calculated month-by-month.
Gaming is a major source of revenue for Tencent. Mobile games contributed RMB 22.2 billion yuan (USD 3.21 billion) to the company’s RMB 88.82 billion yuan (USD 12.92 billion) in the quarter ending in June 2019, according to the entertainment giant’s report.
However, the increasing popularity of short video apps represents a major shift in Chinese mobile users’ entertainment habits.