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Does China Even Need Steam?

Tencent prepares to release a new digital storefront in China that greatly resembles Steam.

Valve's dominant digital marketplace Steam is all but synonymous with PC gaming here in the West, but it may soon get pushed far by the wayside in the massive Chinese market. Recently, the Chinese corporation Tencent—likely best known here as the owner of League of Legends' Riot Games—announced that it would retool its existing Tencent Games Platform (TGP) in a new service called "WeGame" that would allow international users to enjoy its service.


Much as with Steam, there will be a single storefront for games for both global and international players, game developers would be able to talk with players directly through the client, and other community elements will be packed in. Awash in dark blue, the main store page even looks somewhat like Steam. So does WeGame spell the end of Steam in China? In some ways, Tencent bested Steam long ago.

You see, even without international users, TGP is already a juggernaut. Niko Partners analyst Daniel Ahmad, who shared the news about WeGame on Twitter, told me in an email that TGP already boasts 200 million users in China (out of an estimated 300 million total PC gamers) and 33 million daily active users. That already puts it far ahead of Steam in general, which according to existing figures from 2015 "only" has 125 million registered accounts.

In China itself, Steam has only has around 15 million registered users, although that number has been growing as more Western developers choose to localize their games for the market. But numbers aside, Steam has always stood on shaky ground in China.

"Steam in China currently operates in a grey area," Ahmad said. "It currently has a partnership with Perfect World who publish DOTA 2 and Counter-Strike: Global Offensive in the country. That being said, Steam games are not officially approved in China and so the Chinese government retains every right to take down the service at any time."


Steam, in other words, is in a very bad position in China. But Ahmad doesn't think Steam has much to worry about from Tencent in the West based on current information, even after WeGame opens the gate to international users. For one, Steam is well-established here, and there's currently no indication that WeGame does much different from its competitor to lure in converts.

"Right now, Tencent is focusing on growing the platform in China and bringing as many games, both local and foreign, to Chinese gamers," Ahmad said. "Tencent is aiming to do what Steam does, but in China. I don't see it competing with Steam outside of China just yet."

Instead, the move is probably best seen as yet another stage in an evolution that's been unfolding for some time.

"Tencent has continually transformed TGP and last year they announced that they would focus on PC Online games, such as League of Legends and FIFA Online 3, as well as standalone paid games," Ahmad said. "Tencent has begun working with a number of Western developers including Paradox and Klei who have seen their games perform well on the platform. Don't Starve sold a million units on TGP in its first month."

Tencent is expected to reveal more information about WeGame in the coming days.