Tencent Wins Nod for Blockbusters as China Crackdown Softens

It was only the second time Tencent Holdings Ltd. gained licenses for blockbuster titles since Beijing resumed issuing them in April.

Growth at Tencent has evaporated as the company found itself struggling to wring new revenue from aging cash cows such as Honor of Kings. (REUTERS)

Tencent Holdings Ltd. secured a green-light for another clutch of major game titles, reinforcing hopes Beijing is easing a crackdown on the world's largest mobile gaming arena.

It was only the second time the Chinese tech giant gained licenses for blockbuster titles since Beijing resumed issuing them in April. “Pokémon Unite,” developed in tandem with Nintendo Co., was among the 40-plus foreign online titles approved in December by the National Press and Publication Administration. It also cleared other Tencent entries, including popular esports title Valorant. The latest approvals follow “Metal Slug: Awakening” last month.

Tencent harbored high expectations for Unite, which pits two teams of five players against each other in a multiplayer online battle arena format similar to the Chinese company's own League of Legends. Based on the internationally recognizable monster-hunting franchise, it was among a series of titles Tencent hoped would spearhead a global expansion.

Then Beijing launched a campaign to rein in its tech industry's growing power. The subsequent clampdown, which ensnared sectors from e-commerce to fintech and even education over a tumultuous year, spread to online gaming around August 2021. Regulators introduced stringent measures, such as capping play time for minors to a mere three hours a week, and imposed other requirements aimed at curbing addiction.

Growth at Tencent has evaporated as the company found itself struggling to wring new revenue from aging cash cows such as Honor of Kings. This month, co-founder Pony Ma upbraided Tencent's employees for slacking on the job and lacking urgency, a rare show of frustration for the billionaire.

Ma's outburst unnerved observers accustomed to his even-keeled handling of Asia's biggest social media and gaming company, raising concerns Tencent was in for another tough year.

Still, during an analyst call in November, a Tencent executive expressed confidence in winning approval to release more major games soon. This month, China removed its remaining Covid Zero curbs, spurring optimism the world's No. 2 economy will rebound in 2023.

NetEase Inc., Tencent's smaller rival, also won approval for its Fantasy Life in December's batch.