Tencent has decided to close off Penguin Esports completely from June.
The Chinese regulators had also denied a merger that had cost $6 million to the company.
The company has also performed poorly in the Quarters too.
This is quite disappointing news for the gamers out there. Penguin Esports will be going down soon, and the gamers who loved the platform will have to bid their favourite content creators goodbye from there. However, those who had no idea are really shocked about the whole enterprise, as Tencent is one of the biggest companies in the world, and Penguin Esports was another huge gaming platform next to Twitch and had quite a huge number of creators and even followers. In this article, we will be getting into the depths of why Tencent has decided to close off Penguin Esports, and what is up with a huge merger deal?
Why is Tencent shutting down Penguin esports?
Let us get into the main question then. Why is Tencent suddenly shutting down such a successful gaming platform? This, however, has some contentious underpinnings. Penguin Esports was always considered a rival to Twitch, and as the platform is being closed off, there is going to be quite a huge shift in the dynamics of the market. However, the reason for closing the platform is not bankruptcy or lack of funds. In fact, Tencent is still quite a well-to-do company. The reason is completely political.
Tencent is a Chinese company, and they have to adhere to Chinese laws completely. Recently, Chinese laws have been stricter on gaming laws in the country. As everyone knows, China is one of the leading countries when it comes to gaming, yet they have now regulated fixed and rigid laws regarding gaming. This is because children have recently been quite affected by gaming addictions. They want their children to have overall development. Hence, there are quite rigid laws that the company has to adhere to. Yet, if they do follow them, then there is a chance that they might face a loss in other regions. Also, another business idea was rejected, and that created an antitrust situation between the company and the government.
What Happened to the $6 Million Gaming Merger?
Recently, Tencent has been in the news quite a lot because of its amazing idea to merge Huya and DouYu under its own name. We knew these two companies were some of the best gaming companies in China and wanted to bring them together. This new merger would be valued at about $6 million. This would have made Tencent one of the biggest gaming companies in the world. However, the Chinese regulators did not agree to this merger, and hence the plan had to be abandoned. The company's authorities were quite dissatisfied, and they felt that they did not have much choice or trust in the regulators. All of this created a bad feeling about business between both parties. Therefore, they not only wanted to close down the merger but also completely shut down Penguin Esports.
When will Penguin Esports Close?
Tencent has already stated that beginning Thursday, no new registrations for Penguin Esports tournaments will be accepted. Finally, on June 7, the app will be unavailable on the Google Play Store and all the servers will be closed down.
This was quite a shock for everyone. In addition, Tencent's esports branch may have been closed due to poor quarterly sales performance. Hence, it is official that this streaming platform is closing down forever.
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Until next time,