Tencent-backed video game live-streamers Douyu and Huya deny merger rumours as ByteDance deal threatens their status

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Chinese video game live-streaming platform Douyu denied recent reports that it would finally be merging with main rival Huya – both backed by Tencent Holdings – but acknowledged the two firms are working together in some areas, according to local media reports.

Douyu said on Monday that there are no merger plans between the two companies, according to The Paper, an online news organisation under state-backed Shanghai United Media Group. The fresh rumours have emerged more than three years after regulators quashed a planned merger of the country’s two largest game live-streaming platforms orchestrated by Tencent.

The denial also came a day after Douyu and Huya jointly launched an online gala, which airs on February 6 and 7, featuring singing, dancing and other performances by influencers and live-streamers from both platforms.

Douyu and Huya did not immediately respond to requests for comment on Tuesday.

Tencent allows Douyin to air Honour of Kings videos as ByteDance exits gaming

Increased collaboration between Douyu and Huya comes as Tencent looks to boost the audience for its main video game titles by burying the hatchet with rival ByteDance, the owner of TikTok. A new agreement will allow for players to live stream gameplay from the mobile game Honour of Kings, the most lucrative video game in the world, and League of Legends on Douyin, the Chinese version of TikTok, the gaming studios behind the titles announced last month.

In January 2019, a court ruling in Tencent’s favour blocked ByteDance from being able to stream the games on its platforms, including Douyin and Xigua Video. That made Douyu and Huya the premier destinations for such content.

Analysts say the new agreement with ByteDance bodes ill for the Tencent-backed streamers.

“It means Douyu and Huya are losing their advantages in the game live-streaming area,” said Zhang Shule, game sector analyst at consultancy CBJ Think Tank. “If [they] fail to find new monetisation sources … it’ll just be a matter of time for their retreat from the stage.”

Zhang added that even without a merger, the two firms are supposed to be collaborating with each other rather than competing.

Amid shrinking revenue in recent years, both Douyu and Huya have lost the early momentum that made them the dominant Twitch-like platforms in China.

Huya posted 9.2 billion yuan (US$1.3 billion) in revenue in 2022, down 19 per cent year on year. Douyu’s net revenue also tumbled nearly 22 per cent to 7.1 billion yuan that year.

When Tencent attempted to merge the platforms in 2020, the State Administration for Market Regulation killed the plan on concerns of monopolistic practices. At the time, Douyu and Huya controlled a combined 70 per cent of the video game live-streaming market.

By 2021, Douyin had nearly 87 per cent of top live-streaming gamers on its platform while Huya had about 20 per cent and Douyu had 13 per cent, according to an analysis by TalkingData.

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