- Huawei removes Tencent’s online games from its app store.
- The two companies failed to strike a deal over revenue sharing.
- Tencent’s shares gained over 50% in the stock market in 2020.
A source confirmed on Friday that Huawei took an aggressive step of removing Tencent’s (HKG: 0700) online games from its app store as the two companies couldn’t strike a deal over revenue sharing. The news comes more than a month after Tencent had announced a 29% annualised growth in its third-quarter revenue.
Tencent is currently a little under 0.5% up on the intraday chart on Friday. Including the price action, the stock now has a per-share price of £53.43 versus £31.50 per share in March, when the COVID-19 crisis wreaked havoc on the global financial markets. Tencent had started the year 2020 at £36.07 per share. The price action should come in handy if you are interested in investing in the stock market.
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Tencent Holding’s statement on Friday
In its statement on Friday, Tencent said:
“Due to the failure of Huawei’s mobile game platform to renew its contract with our Mobile Game Promotion Project Agreement as scheduled, relevant products of Tencent Games were suddenly removed from the shelves early this morning. At present, active communication is being made to try to resume as soon as possible.”
Tencent is known as one of the largest global providers of online games. According to IDC and Canalys (market research firms), on the other hand, Huawei currently holds a 14.9% share in the global phone market and a sharply broader 41.4% in China.
As per the sources, Huawei wishes to book 50% of the revenue generated for Tencent’s online games via its app store – a proposition that Tencent has so far not accepted. Last month, Huawei tested A.I software that could identify Uighur Muslims and alert police.
Huawei refrained from commenting on Friday
Huawei refrained from commenting any further on the new on Friday. Tencent also did not make an official statement on whether the two companies were struggling to reach an agreement on revenue sharing.
Huawei’s demands regarding revenue sharing were not well-received by several other game developers as well, including Mihoyo. The Shanghai-based developer decided not to make its hit title, Genshin Impact” available for users on Huawei’s app store in 2019.
Tencent performed largely upbeat in the stock market in 2020 with an annual gain of more than 50%. At the time of writing, the Chinese multinational technology conglomerate is valued at £510 billion and has a price to earnings ratio of 37.84.