Tencent, the Chinese gaming giant, has reportedly canceled the development of an unannounced NieR mobile game after nearly two years of work. Read on to learn more about the situation and the general climate of Tencent's gaming business.
Tencent Reportedly Cancels Unannounced NieR Mobile Game
Failed to Reach Negotiation Deal on Royalty Fees with Square Enix
Development on the unannounced NieR mobile game was made in December last year, as Tencent faced challenges in finding a monetization model for the title, according to sources cited in a Reuters report. The project reportedly made significant progress, with a playable internal demo already out of the way. The axing of the NieR mobile game did not result in job losses, as employees involved in the development were permitted to transfer to other Tencent projects.
The cancellation of the venture came as Tencent grappled with high development costs, franchise rights, and platform fees. Sources in Reuter's report suggested that Tencent faced difficulties in negotiating royalty fees which contributed to the decision to cancel the project.
Tencent reportedly settled to pay for royalty fees below 10%, a figure that did not meet the expectation of NieR IP holders, Square Enix. According to sources with knowledge of the matter, Tencent is struggling to pursue IP games as the growth in mobile games slows disproportionately to rising development costs.
Tencent CEO Believes It Will Lose Significant Footing in Gaming Business
Tencent's decision to cancel the NieR mobile game came at a time when the company faced a slump in its gaming business. The company has struggled to replicate the success of Riot's "League of Legends: Wild Rift" since 2020. "We have found ourselves at a loss, as our competitors continue to produce new products, leaving us feeling having achieved nothing," Tencent CEO Pony Ma reportedly stated last week at Tencent's annual meeting.
The company had previously secured multitudes of licensing deals with popular franchises and often outbidding rivals like NetEase. Tencent's investments have been expansive, including acquiring stakes in Level Up! Games, Riot Games, and Ubisoft, among others. It was reported that the company looks to move towards controlling the entire supply chain of China's gaming industry through acquisitions and substantial shareholder stakes.
The Tencent CEO stated last week that its gaming business is not meeting expectations. However, the company aims to bounce back with a roster of other IP games for mobile slated to launch this year and beyond, including "Delta Force" with Tencent subsidiary TiMi Studios , "Need for Speed: Mobile" to be published with EA, as well as the "Assassin's Creed" and "The Division" mobiles games after Ubisoft reportedly authorized Tencent to develop the projects.
Source:
Tencent axes Square Enix 'Nier' mobile game as it hunts for a new hit -sources
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Ubisoft authorized Tencent to develop The Division
and Assassin's Creed
mobile games
