China’s largest gaming firm Tencent can finally advertise on ByteDance apps, according to online gaming analytics platform DataEye, a new milestone in the two companies’ relationship. ByteDance and Tencent have competed fiercely over the years, barring each other from cross-promotion and regularly engaging in legal wrangles. As a result, Tencent games have had limited exposure on ByteDance platforms, while ByteDance’s apps have had little publicity on Tencent platforms.
The latest advertising data shows that Tencent’s war game Return to the Empire and multiplayer role-playing game Naruto have been advertised on Bytedance’s Douyin (China’s TikTok twin), news app Toutiao, and Xigua Video in the past seven days.
Why it matters: The relationship between Tencent and ByteDance has long been tense due to their rivalry in content, video, and gaming. Recent developments show the two companies are moving toward a reconciliation after years of bitter competition.
- On Feb. 7, Douyin and Tencent Video announced an unexpected cooperation, in which the two parties will jointly explore the promotion of videos and the secondary creation of short videos. Tencent has issued a long-term video copyright authorization to ByteDance and clarified secondary video creation rules. On Tuesday, Tencent was able to register the official account of Tencent Video on Douyin. The partnership deal between the two companies has even become a hot topic on microblogging platform Weibo.
- Such reconciliation was unthinkable a few years ago. In the second half of 2021 alone, Tencent sued Douyin 168 times for video rights infringements, with compensation reaching almost RMB 3 billion (or $430 million).
Details: Tencent’s game Return to the Empire has started to place advertisements on ByteDance’s Toutiao and Xigua Video in recent days. The game had previously been advertised mostly within Tencent’s platform, according to DataEye statistics. In addition, ByteDance’s Douyin accounted for about 15% of the gaming ads distribution for another Tencent game Naruto.
- The reconciliation will potentially benefit both sides. Traffic from ByteDance platforms may head in Tencent games’ direction. At the same time, Tencent’s ubiquitous app WeChat could open up to ByteDance and introduce new users to ByteDance apps.
- The promotion of bestselling Tencent games (like Honor of Kings) in Douyin may enrich ByteDance content.
- The move will have repercussions in livestream gaming too. In the future, ByteDance-based games may also enter the WeChat network and WeChat video channel.
Context: Sharing a focus on content and entertainment, Tencent and ByteDance were the top-grossing publishers in global mobile app stores in the first half of 2022. Tencent was the top-grossing publisher in the game and non-game categories, earning about $3.3 billion in the first half of 2022. The figure is almost 153% higher than ByteDance, which came second with $1.3 billion in revenue. Their disputes have been long-lasting:
- In January 2023, Tencent super app WeChat temporarily blocked users from accessing links to ByteDance-owned short video app Douyin.
- In June 2021, ByteDance criticized Tencent’s practice of blocking links to its products on WeChat and QQ in an online post, attaching a 59-page PDF file chronicling incidents of blocking in the past three years.
- In May 2019, Tencent filed two lawsuits against ByteDance, requesting the owner of Douyin stop streaming Tencent’s hit titles CrossFire and Honour of Kings.
- In June 2019, Tencent filed six new lawsuits against ByteDance, demanding the company delete all Honour of Kings gameplay videos from the accounts of six specified users on Toutiao and Douyin. It demanded ByteDance pay RMB 10.8 million (around $1.56 million) in damages.