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 19th, the DNF Mobile Game officially announced that it will no longer be listed on the application store of some Android platforms from June 20th due to the expiration of the contract. This is Tencent's first mobile game to choose to remove 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.

Wall Street research found that as of 8 pm on June 19th, the DNF mobile game could not be found on the OPPO and vivo app stores, but it could still be searched for on the Huawei and Xiaomi app stores. In addition, the DNF mobile game is still the best-selling game on 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 developers distribute games through Android app stores, they need to pay a certain percentage of revenue to the app stores serving as channels, which is known as 'channel tax'. Generally speaking, the revenue sharing ratio of the Apple App Store is 30%, while that of most Android app stores is as high 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 service organization for mobile Internet composed of first-line domestic smartphone manufacturers. When it was established in 2014, the alliance members agreed on a 5:5 revenue-sharing ratio with game developers.

Therefore, Zhang Shule, an internet industry analyst, also told Wall Street that the DNF mobile game's announcement of removing some Android app stores may be due to the high rate of Android channel taxes and the overreactions of channel service providers.

As game developers have been saddled with high revenue sharing ratios for a long time, the 'war' between game developers and Android app stores has already begun.

In 2020, due to the failure to reach a revenue-sharing ratio of 7:3 (with game publishers taking 70%), miHoYo's Genshin Impact did not initially appear in the Android app store, exposing the conflict between Android channels and game developers to the public for the first time. Later, Genshin Impact reached a 7:3 revenue-sharing agreement with the Xiaomi app store.

Later, more and more game products refused to cooperate with Android channels, including miHoYo's Honkai Impact: Railgun, NetEase's All-Star Street Basketball Party, and Kuollo Technology's Mingchao.

NetEase CEO Ding Lei once said, "China's Android channel revenue sharing is as high as 50%, even 20% more expensive than Apple, which is the most expensive and unhealthy in the world."

More and more game products choose not to cooperate with Android channels. The key is that they have discovered that even without Android channels, excellent games can still be released.

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

Zhang Shule stated that only 'super-strong' mobile games can resist Android channels. Although it is too early to call DNF a super-killed product, Tencent is heavily invested in it, hence the move.

In addition, Zhang Shule further pointed out that the DNF mobile game has just started to promote it, and the channel service users have just gathered and their levels are not high, so their stickiness is not strong. Tencent is confident to attract the vast majority of users to its official channel. Only after staying with the channel service for a long time will there be net losses of channel service users and major negative public opinion on the brand.

In the case of sluggish growth in the gaming business, Tencent has high hopes for the DNF mobile game. As of late last year, the 'Star of Elements' failed to become a mega-hit. The DNF mobile game, which launched on May 21st this year, carries Tencent's expectations of creating a new bestseller and is expected to bring new growth momentum to Tencent's gaming business in the second quarter of this year.

Morgan Stanley believes that the DNF mobile game is one of Tencent's largest game releases in recent years and should be a key catalyst for driving the turning point in China's domestic gaming business growth in the second quarter. The total revenue of the game in the first year is expected to reach 10 billion yuan.

After one month since the launch, the DNF mobile game's performance is also very impressive. Sensor Tower pointed out that as of June 17th, the DNF mobile game has steadily topped the total iPhone sales list in China for 28 consecutive days, making it the hottest mobile game in recent years.

In addition, Sensor Tower's store intelligence platform shows that in the last 11 days of May, the game's iOS revenues in China surpassed the combined revenue of King of Glory and Peace Elite, achieving a 12% growth in Tencent games' mobile revenue in May.

According to data from Yuehu, the first week's revenue of DNF mobile game on both platforms has exceeded 1 billion, and its total revenue for the first month is expected to approach 3 billion.

Faced with such a strong "cash cow", Tencent obviously 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, not only against Tencent, but also against the entire gaming industry.

Editor/Somer