Tencent’s Hit Stays on Top After ‘Genshin Impact’ Foe’s Release

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Tencent Holdings Ltd.’s Dungeon & Fighter Mobile kept its spot as China’s top-grossing game despite the launch of a major rival from Genshin Impact studio Mihoyo Co., passing a key test of popularity in an intensely competitive market.

Zenless Zone Zero brought in $3.4 million from iPhone players in China on July 4, falling shy of the $8.5 million spending in DnF Mobile, according to Sensor Tower data provided to Bloomberg News. Globally, ZZZ racked up $5.9 million on iOS and Google Play on its first day, and it topped the download charts in dozens of markets from the US to Japan and South Korea.

Tencent’s DnF Mobile was the first of a string of big summer releases in China’s $40 billion-plus games market. Its resilience against Mihoyo’s big debut bodes well for the online entertainment leader’s prospects. Tencent has struggled for years to find the next big hit to augment or replace aging titles like Honor of Kings and Peacekeeper Elite.

Tencent in June became one of China’s best-performing stocks. It’s up 29% so far this year thanks to the strong debut of its latest blockbuster title, which was originally developed by Korean studio Nexon Co.

“DnF Mobile’s momentum is still going strong, but it’s worth noting that ZZZ is a global, cross-platform play,” said Zeng Xiaofeng, Niko Partners analyst. Mihoyo is spreading its marketing internationally and across PC and console platforms alongside mobile, unlike Tencent with its narrow focus on smartphone players in China, he added. More tests of DnF Mobile’s popularity are due in the coming weeks.

Hangzhou-based NetEase Inc. is slated to release the mobile version of its three-year-old action game Naraka: Bladepoint on July 25, and Tencent’s similarly styled Breaking Dawn — an extension of the Honor of Kings franchise — is also expected to roll out later this month.

Mihoyo is among the world’s fastest-growing gaming companies, riding its 2020 sensation Genshin Impact to quickly become one of China’s leading creative studios alongside Tencent and NetEase. Its 2023 release, Honkai: Star Rail, also struck gold among anime enthusiasts worldwide, tapping into a burgeoning genre its older Chinese peers have yet to crack.

ZZZ is set in a post-apocalyptic world where players rotate a roster of three fighters to slay monsters. It marks Mihoyo’s first attempt at a fast-paced hack-and-slash game, but still retains familiar Mihoyo hallmarks. ZZZ’s art design is evocative of Mihoyo’s prior work and its monetization system is centered around drawing up new characters. Producer Li Zhenyu, who started the project in 2020, drew inspiration from action and fighting classics like Dark Souls and Street Fighter, which he’s played for over 2,000 hours, he said in a June interview with Famitsu.

Mihoyo started in 2011 as a student business project among three coders and gaming fanatics. The company now has 5,000 employees across places like Singapore, Japan and the US, according to its website. With next to no external funding, the studio has emerged as one of Tencent’s most formidable rivals in China, leading a cadre of young firms in search of multiplatform hits with global appeal.

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