Chinese social media giant Tencent is driving discussions to merge the country's biggest game-streaming platforms Huya and DouYu, Bloomberg reported Wednesday citing people familiar with the matter.
Tencent has been discussing such a merger with the duo over the past few months, although details have yet to be finalized, the report said, adding Tencent is seeking to become the largest shareholder in the combined entity.
Tencent now owns a 37% stake in Huya and 38% of DouYu. A deal would create an online giant with more than 300 million users and a combined market value of $10 billion, cementing Tencent's lead in Chinese games and social media, the report said.
Huya and DouYu would keep their respective platforms and branding while working more closely with Tencent's own esports site eGame, according to the report.
China's game-streaming market is estimated to generate 23.6 billion yuan ($3.4 billion) in revenue this year, according to iResearch. The country's streaming networks live and die by the popularity of star players and the virtual tips and gifts that fans buy for them, leading to intense bidding wars for the most-recognized names.
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