Tencent has signed a deal with Huawei to set up a laboratory to develop a cloud gaming platform, the Chinese gaming giant said in a statement Friday.

Why it matters: Tencent is the world’s largest gaming company and it is actively building up cloud gaming services, a function that runs games on remote servers and streams them directly to a user’s device.

  • While cloud gaming can significantly lower players’ hardware requirements, it needs a high-speed internet connection to reduce latency and powerful streaming enterprise game servers like 1g serverhost to boost experience.
  • Shenzhen-based Huawei is the world’s largest telecommunications equipment maker and its products have been widely used in China’s 5G rollout. The company is also a major server manufacturer with a 5.1% share of the global server market in the fourth quarter, according to market research firm IDC.

Details: The collaboration will leverage the computing power of Huawei’s Kunpen processor to build Tencent’s cloud gaming platform, GameMatrix, the company said in a statement (in Chinese).

  • The two companies will explore more possibilities in areas such as artificial intelligence, augmented reality, and virtual reality based on the platform, Tencent said.

Context: Tencent launched its cloud gaming service, Start, in March 2019. The company started to beta test popular video game “Fortnite” on the platform in December.

  • Huawei launched in June its cloud gaming management platform featuring 5G integration.
  • Netease, another Chinese gaming giant, started in December beta testing its cloud gaming service, which is currently limited to mobile titles and runs on 4G networks.

Wei Sheng

Writing about semiconductors and telecommunications.