Tencent is planning a Valorant League as gaming crackdown eases in China

Tencent is planning a Valorant League as gaming crackdown eases in China

Tencent is planning to launch a Valorant esports league when the hit shooter title debuts in China this year, one of the strongest signs that the country’s internet giants are getting back to business after a two-year industry crackdown.

TJ Sports, a unit of Tencent, has held discussions with top Chinese esports players in recent days about creating the competition, people familiar with the matter said. It could start a tournament over the summer at the earliest, when Tencent launches the game domestically, said one of the people, asking not to be identified discussing private information.

The talks are in their early stages and Tencent may delay their timeline, the people said. But a Valorant league will help restart competitive online gaming in China after a two-year lull when pandemic restrictions and Beijing’s crackdown on youth addiction chilled the world’s biggest gaming arena.

Launched globally in 2020, Valorant has grown to become one of the most popular esports titles, competing for a multi-billion dollar market alongside rival shooters like Blizzard’s Overwatch. Tencent won approval to launch the bond only in December, which investors took as a sign that the government was preparing to relax its grip on the sector.

Shares of Tencent extended gains in late Hong Kong trading hours to rise as much as 1.8 percent before closing broadly unchanged. Exchanges including Morgan Stanley have raised their price targets on Tencent in recent weeks, anticipating a rebound in growth as restrictions ease and efforts to sell video ads gain momentum.

“These are positive signs that China’s tech companies are back in business with regulatory headwinds largely overdue,” said Marvin Chen, an analyst at Bloomberg Intelligence. “It is also in line with recent comments from policy makers that innovation is still at the forefront of national development.”

A Tencent representative said in a message that the company was making preparations related to Valorant and had not confirmed a release date for the game.

A Valorant extravaganza would be added to Tencent’s roster of competitive Chinese leagues, spanning genres from battle arenas to racing to first-person shooters. Tencent formed TJ Sports with North American subsidiary Riot Games in 2019 to run League of Legends competitions. Another unit runs tournaments based on Honor of Kings, Tencent’s long-standing mobile cash cow.

Valorant, along with potential esports festivities, will help Tencent bolster a business hurt by stricter scrutiny of online content. The WeChat operator’s growth has all but evaporated since 2021, when regulators began placing restrictions on everything from playtime to undesirable content.

In December, the Chinese social media giant secured the green light for a number of big releases, including Valorant and Pokémon Unite, bolstering hopes that China is easing a two-year crackdown on Big Tech. Valorant, in particular, attracted attention because Beijing had in the past signaled its disapproval of violent shooters with perceived Western cultural overtones. Tencent was forced to replace PUBG, for example, with a less bloody alternative called PeaceKeeper Elite, which also came with political slogans.

The company has invested billions of dollars in talent agencies, streaming sites and tournament organizers to create the necessary infrastructure to turn niche professional gaming into an instrumental part of its growth strategy.

The League of Legends Pro League in China — operated by TJ — is the largest esports league in the world in terms of partner teams and viewership. The Shanghai-based company generated around US$150 million (approximately Rs. 1,200 crore) in revenue in its first two years from the sale of media rights, tickets and merchandise.

Outside of China, Riot itself organizes three international Valorant leagues with a collective 30 teams in places like Los Angeles, Seoul and Berlin.

© 2023 Bloomberg LP

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