A statement by Tencent reads; “Due to the failure of Huawei’s mobile game platform to renew its contract with our Mobile Game Promotion Project Agreement as scheduled, relevant products of Tencent Games were suddenly removed from the shelves early this morning.”
Although Xiaomi is referred to as China’s Apple, in the real sense, Huawei is the company that is the equivalent of Apple in China in terms of revenue and market share. Huawei presently controls 41.4% share of the China mobile phone market and 14.9% of the global market, according to data from market research firms IDC and Canalys.
Although Tencent sells some of the top-ranked online games worldwide, its partnership with Huawei is an important one as it leverages the hundreds of millions of Huawei phones that are in circulation in China, Tencent’s biggest market.
Huawei and Tencent did not immediately respond to a request by Reuters seeking comment. However, a source familiar with the matter hinted that the games were removed because the companies could not agree on a revenue-sharing deal for the app store sales. Huawei had reportedly insisted on receiving a 50% cut, a term Tencent disagrees with.
Tencent hints that they are actively communicating and negotiating with Huawei’s mobile game platform in a bid to reach a resolution as soon as possible. The brand also extended an apology to all users for the inconvenience.
Apart from Tencent, there is mounting resistance from game developers to Huawei’s revenue demands. Last year, Shanghai-based developer Mihoyo, decided not to place its hit game “Genshin Impact” on Huawei’s app store due to failure to reach an agreement with the commission structure for sales.
This dispute is reminiscent of the imbroglio between Apple and Epic Games which saw Apple remove Fortnite and other Epic Games’ titles from the App store due to disagreement over revenue collection.
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