Honor of Kings,' the Red-Hot Mobile Game in China, Tries to Crack the U.S.

By Alyssa Abkowitz in Beijing and Sarah E. Needleman in New York Features Dow Jones Newswires

China's Tencent Holdings Ltd. is banking on a successful launch abroad for "Honor of Kings," but the hit smartphone game faces an uphill battle in the U.S., where the company can't lean on its popular messaging apps to hook players.

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The game, which allows teams of players to battle one another online, is so popular in China that Tencent earlier this year installed a curfew for young players after one state-run newspaper called it a "drug" and "poison."

With 50 million daily active users there, according to Tencent, "Honor of Kings" is in the same league as Activision Blizzard Inc.'s global hit "Candy Crush Saga," analysts said.

In the second quarter alone, the game -- which is free to play and generates revenue through small in-game purchases from weapons to character upgrades -- pulled in $375 million through Apple Inc.'s App Store in China, app data provider App Annie Inc. estimates.

But despite being the world's most valuable gaming company, Tencent has yet to release a hit game in the U.S. -- and "Honor of Kings" is its most ambitious attempt to date.

To maximize the appeal of the game to Western users, the company struck a deal with DC Comics and will be swapping out historical Chinese characters for DC Comics superheroes such as Batman and Wonder Woman. The game also got a new name: "Arena of Valor."

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Earlier this month, Tencent put the game in the Google Play store with a "coming soon" tag, and is inviting players to preregister to win rewards.

But once "Arena of Valor" is launched in the U.S. later this year, it won't get a boost from the tools that have helped Tencent drive the game's popularity in China: social-networking apps WeChat and QQ.

WeChat has more than 960 million monthly active users globally and QQ has 850 million, according to Tencent. The company doesn't break out the apps' users by country but has said the overwhelming majority are in China, and that players there can launch games through the apps.

In the U.S., people typically log into mobile games directly without first going through the front door of a social app. While games connected through social apps popular in the U.S. such as Facebook share similar features, they aren't as deeply integrated as Tencent's games and social apps are.

The distinction is key. With WeChat and QQ, Tencent can better control the way games are promoted and displayed, and give its own games top billing. It also can push features designed to boost engagement, such as forming teams with friends who use the app. Those abilities played a major role in helping "Honor of Kings," which launched in 2015, quickly spread in popularity, said Sissi Chu, an analyst at the mobile-data firm Jiguang.

One uncertainty is whether "Arena of Valor" can attract large numbers of female players in the U.S. -- a distinction that propelled its success at home.

"Honor of Kings" counts more female players than male players in China, and is the only battle game ranked among the top 10 games played by females there, according to Jiguang. In the U.S., one of the most popular mobile games in the genre is "Clash of Clans," of which about 30% of players are female, according to a University of Southern California study.

Several female gamers in China said they were motivated seeing friends play, and a "fear of missing out" fueled by WeChat and QQ. They also found the game's tutorial and initial stages catered well to players new to the genre.

Few of China's popular mobile games are even available in the U.S., and those that are often aren't translated into English, according to Sensor Tower Inc., an app analytics firm. Even if "Arena of Valor" drums up a large female player base in the U.S., analysts are skeptical.

This year, the U.S. is on track to reach $25.1 billion in game-software revenue, trailing only China with a projected $27.5 billion, according to the research firm Newzoo BV.

Many blockbuster games in Asia haven't achieved the same level of success in the U.S. as in their home countries.

GungHo Online Entertainment's "Puzzle & Dragons," for example, was the No. 2 grossing mobile game across app stores in Japan last year but only No. 74 in the U.S., according to Sensor Tower.

Kazuki Morishita, chief executive of Tokyo-based GungHo, said different game mechanics and designs are attractive to people in different markets, akin to how tastes in food and music differ from country to country.

"We cannot say there's an absolute answer," he said through a translator. "As a game designer, you think your game should be popular around the world."

--Xiao Xiao contributed to this article.

Write to Alyssa Abkowitz at alyssa.abkowitz@wsj.com and Sarah E. Needleman at sarah.needleman@wsj.com

(END) Dow Jones Newswires

October 20, 2017 05:44 ET (09:44 GMT)