Tencent has confirmed its long-rumored merger of Cloudary, the online publishing business of Shanda. Both companies internally yesterday announced their joint venture, named Yuewen Group, which will include all online publishing sites and digital reading services owned by the two, as first noted by Tencent’s online news site QQ.com.

Tencent thus will become the biggest online book publisher in China, as Cloudary owns the largest publishing sites, and Tencent has its own huge user base. After the merger it will have few competitors in the market. As licensing book rights to TV drama and film production companies or game developers has become increasingly popular, as one of the biggest gaming companies by user base and revenue, Tencent will be able to develop more games from book rights held by Cloudary.

Consuming literary works online is widely popular in China. Readers can either buy finished works or subscribe to chapter releases on digital publishing sites. Pricing is based on the number of Chinese characters, and publishing platforms share revenues with registered authors.

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Tracey Xiang

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com