Just one month after its launch,$TENCENT (00700.HK)$Its subsidiary "Dungeon and Warrior: Origin" (hereinafter referred to as DNF mobile game) has dropped a bomb on the gaming industry.

On June 19, the official announcement by DNF mobile game stated that due to the expiration of contracts, the game would no longer be available on some Android app stores as of June 20. This is the first time Tencent has chosen to remove a mobile game from some Android channels.

According to insiders, these platforms include the app stores of Huawei, OPPO, and vivo, but not Xiaomi. In fact, the contracts with these companies have expired, so DNF mobile game has adjusted its distribution strategy.

As of 8pm on June 19, DNF mobile game cannot be found in the OPPO and Vivo app stores, but can still be searched for in the app stores of Huawei and Xiaomi. In addition, it is still the top-selling game in the Huawei app store.

Due to its large user base, major Android app stores have always been an important channel for game product distribution. As for the reason why DNF mobile game did not renew its contract with some Android platforms, the official has not yet explained, but it is not difficult to imagine the contradiction between the Android channel and the game developer due to the high share ratio.

When game publishers distribute games through Android app stores, they need to pay a certain percentage of the revenue sharing to the channel, known as the "channel tax." Generally speaking, the commission rate for Apple App Store is 30%, while most Android app stores charge as much as 50%.

It is worth mentioning that Huawei, OPPO, and Vivo are all members of the Mobile Hardcore Alliance (M.H.A), a value-added mobile internet service organization composed of domestic top-tier smartphone manufacturers. When it was established in 2014, the members of the alliance agreed to a 5:5 revenue-sharing ratio with game developers.

Therefore, internet industry analyst Zhang Shule also told Wall Street News that DNF mobile game's announcement of withdrawing from some Android app stores may be due to the excessively high Android channel tax and improper behavior of the channel.

Game publishers have long been unhappy with the high revenue-sharing ratio charged by Android app stores and the conflict between them has been gradually escalating.

In 2020, due to the failure to reach an agreement on the 7:3 (game developers take 70%) revenue-sharing ratio, miHoYo's "Genshin Impact" was not listed on Android app stores at the beginning. This was the first time that the conflict between Android channels and game developers was exposed to the public on a large scale. Later, "Genshin Impact" reached a 7:3 revenue-sharing agreement with the Xiaomi app store.

As a result, there are more and more game products that refuse to cooperate with Android channels. This includes last year's miHoYo's "Honkai Impact 3" and Netease's "Super Star Street Ball Party", as well as this year's "Mingchao" from Coolcore Technology.

NetEase CEO Ding Lei once said, "The channel tax on China's Android channels is as high as 50%, which is about 20% more expensive than Apple's. It's the most expensive and unhealthy in the world."

As more and more game products choose not to work with Android channels, the most crucial thing is that they have found that even if they leave Android channels, it seems that it will not have too much impact on the distribution of the game. Excellent games can still thrive.

As the world's largest game developer, why did Tencent choose DNF mobile game to launch the first attack against Android channels?

Zhang Shule believes that only super-popular mobile games with a lot of fighting power can take such an approach. Although DNF cannot yet be considered a super-popular game, Tencent has invested heavily in it, which is why it finally acted.

In addition, Zhang Shule further pointed out that DNF mobile game has just begun to promote itself, and the channel service users have just gathered and their levels are not high yet. Therefore, Tencent is confident that it can attract the vast majority of users to its own official service. Only after channel service has been around for a long time, there will be net losses and major negative public relations impact on the brand.

In the context of sluggish growth in the gaming business, Tencent has high hopes for DNF mobile game. When the game "Starry Dream: Fantasy Star Online" launched at the end of last year, it failed to become a hit, and DNF mobile game, which was launched on May 21 this year, carries the expectation of being the new hit game for Tencent, and is expected to bring new growth momentum to Tencent Games.

Morgan Stanley believes that DNF mobile game is one of Tencent's largest game releases in recent years and should become one of the key catalysts for the inflection point in Tencent's domestic gaming business in the second quarter of this year. The game is expected to generate total revenue of 10 billion yuan in its first year.

DNF mobile game has performed very well since its launch a month ago. According to Sensor Tower's report, as of June 17th, DNF mobile game has been steadily topping the list of top-selling games in the national iPhone market for 28 consecutive days, making it the hottest mobile game at launch in recent years.

In addition, the Store Intelligence platform of Sensor Tower shows that in the last 11 days of May, the game's revenue on the domestic iOS market surpassed the total revenue of "King of Glory" and "Peace Elite", resulting in a 12% growth in Tencent Games' mobile revenue in May.

According to data from Yuehu, the double-end first week revenue of DNF mobile game has exceeded 1 billion, and it is expected that the total revenue in the first month will be close to 3 billion.

In the face of such a strong 'cash cow', Tencent clearly hopes that more profits can enter its own pocket. If this refusal to explore the Android channel is successful, Tencent may usher in higher profit growth in the future.

This is a significant rebellion, both against Tencent and the entire game industry.

Editor/Somer