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Huawei Purges, Then Reinstates Tencent's Games as Revenue Sharing Negotiations Heat Up

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Two of China’s biggest names in tech appear to be in an Apple vs. Epic-style spat over how to carve up the mobile game revenue pie.

Huawei temporarily removed Arena of Valor and other games from Tencent, the world’s leading game publisher in terms of earnings, from its app store after revenue sharing talks between the companies broke down. Per Reuters, the games were reinstated on Friday after the two negotiated an agreement, and Tencent said in a press statement that “both sides will continue to work together to bring better experiences and services to consumers.”


The games were removed after a “big change” Tencent made in how the companies work together, according to a Bloomberg report. Tencent, which owns the popular games League of Legends and Clash of Clans and handles licensing for other titles such as PUBG and Monster Hunter: World in China, announced the change Thursday in a post on Huawei’s gaming app but didn’t go into further details.

More than two-thirds of smartphones in China run on Google’s Android operating system, but its Play Store isn’t available in the country, leaving users beholden to local manufacturers to download apps. Huawei, the top smartphone manufacturer in the country, told Bloomberg that its legal team recommended the move because Tencent was “unilaterally asking to halt cooperation.” For its part, Tencent said a promotion agreement between the two expired before a new one could be struck, and that lapse led Huawei to temporarily kick its games off its app store.


According to a Tencent source that spoke with Reuters under the condition of anonymity, negotiations soured after Huawei insisted on a 50% cut of Tencent’s game sales on its app store. It remains unclear what share the companies’ decided on in their new agreement.

It’s been a rough week for mobile game players in China. Just yesterday, Apple purged 39,000 game apps from its Chinese app store, its largest removal ever in a single day per Reuters, from publishers and developers who failed to secure government-issued licenses (a process that’s practically impossible unless the company’s partnered with a domestic publisher). Just 74 of the top 1,500 paid games on the Apple store reportedly survived the crackdown.