Hi all, this is Zheping in Hong Kong. The closest rival to Tencent in Chinaâs video game market fashions itself as the anti-Tencent. But fir
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Hi all, this is Zheping in Hong Kong. The closest rival to Tencent in Chinaâs video game market fashions itself as the anti-Tencent. But first⦠Todayâs must-reads: ⢠Stocks that went boom early in the pandemic are [now going bust](
⢠Putinâs crackdown is pushing [media into crypto](
⢠Goldman Sachs is [pulling out of most SPACs](
⢠Bitcoin has [lost more than half of its value]( since November Player 2 enters the game You may have never heard of NetEase Inc., but to Chinese gamers like me, itâs a name that pops up every time I start up a game of Overwatch or Warcraft. NetEase is big and trying to get even bigger â in part by doing [the sorts of things]( its closest competitor, Tencent Holdings Ltd., wouldnât do. A part of that strategy kicked off last week, when NetEase opened its first game development studio in the U.S. Itâs the latest in a years-long quest to expand beyond China, which has become all the more urgent since Beijingâs crackdown on internet companies. In five years, the Hangzhou company [wants to put its name behind]( a quarter of new, triple-A releases by either investing, publishing or making those games itself. NetEase is Chinaâs local publisher of Activision Blizzard Inc. franchises, and its sales already surpass those of Activision. But it faces tough competition from Chinaâs largest gaming giant: Tencentâs deep pockets allowed it to take over Riot Games Inc. and Supercell Oy, and the company is accelerating its own expansion overseas. NetEase executives see their singular focus on games and a track record of original hits as an advantage over Tencentâs sprawling empire of social media and financial technology. NetEase was founded in 1997 as one of Chinaâs first email services and web portals. When the dot-com bubble burst, the founder William Ding moved into PC games, acquiring a team of developers that specializes in online role-playing games. In the early 2000s, they created the companyâs first two hits: turn-based, online RPGs based on the Monkey King, a legendary mythical figure in Chinese culture. The games were uniquely Chinese in a market dominated by South Korean imports. That helped boost NetEase to [become Chinaâs No.1]( gaming company by revenue in 2005. In another big milestone in 2009, NetEase took over the Chinese publishing rights of World of Warcraft from another local company. Its creator Blizzard has been working with NetEase ever since, and the Diablo Immortal mobile game they co-created will be out June 2. Tencentâs foray into gaming came later but ferociously. Its first product QQ debuted in 1999 as an instant messaging service popular among teens, similar to AOL Instant Messenger. Tencent used the platform to promote online games â first in the hyper-casual and card genres and then more serious titles like Nexon Co.âs Dungeon Fighter Online. Rivals accused Tencent of cloning their products, but with revenue pouring in, Tencent scouted Asia for publishing deals and eventually went global. In 2011, it paid $400 million for a controlling stake in the League of Legends maker Riot. And a year later, it invested $330 million in Epic Games, which in 2017 found its biggest hit in Fortnite. NetEase has toiled in Tencentâs shadow for about a decade, and their gap grew bigger in mobile because no one can better combine social and gaming than Tencent with its superapp, WeChat. NetEase is laying a counterintuitive strategy for growth: Itâs making console games, which are almost nonexistent in China. Thatâs where the new American studio comes in. NetEase also recently hired Toshihiro Nagoshi, who spent three decades at Sega Sammy Holdings Inc. and [created the Yakuza series](. Tencent and NetEase are a little like high school rivals. Tencentâs mascot, a penguin with a red scarf, is a subject of scorn around the NetEase headquarters. Last month, NetEase accused Tencent of copying its promotional materials, which the artists hired by Tencent denied. On the Chinese microblogging site Weibo, a NetEase account joked about establishing an âanti-penguin office.â â[Zheping Huang](mailto:zhuang245@bloomberg.net)
The big story Palantirâs stock took a beating. The shares [plummeted the most since September 2020]( after the data analysis company reported disappointing financial results. [Peter Thielâs net worth]( took a hit. What else you need to know India said Twitter violated the constitutional free speech rights of a local lawyer by [suspending his account](. Apple is keeping its tap-to-pay functionality to itself, a move apparently designed to [protect its own revenue](. Thailandâs army told troops not to shop on the website Lazada after an ad on TikTok was [accused of insulting the monarchy]( and caused an uproar. Better, the online mortgage lender that conducted a mass firing over Zoom, [hired a former Goldman Sachs banker]( with eyes on a stock listing. Twitterâs stock fell after Hindenberg Research raised the prospect that [Elon Musk could seek to renegotiate]( the terms of his acquisition. Microsoft has $1.3 billion on the line as the U.S. Army reviews whether to purchase the companyâs [HoloLens goggles for combat training](. Follow Us More from Bloomberg Dig gadgets or video games? [Sign up for Power On]( to get Apple scoops, consumer tech news and more in your inbox on Sundays. [Sign up for Game On]( to go deep inside the video game business, delivered on Fridays. Why not try both? Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights.âââââââ You received this message because you are subscribed to Bloomberg's Fully Charged newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox.
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