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.

Writing about semiconductors and telecommunications.