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DreamStar Launch: Tencent’s Gaming Salvo Takes Aim at NetEase Dominance

DreamStar Launch: Tencent’s Gaming Salvo Takes Aim at NetEase Dominance

Chinese tech titan Tencent Holdings (0700.HK) unveiled “DreamStar,” a highly anticipated party game, marking a potential challenge to its domestic rival NetEase, according to analysts.

“DreamStar” introduces gamers to a whimsical world where cartoon characters navigate obstacle courses, positioning itself as Tencent’s response to NetEase’s wildly successful “Egg Party.” The unexpected popularity of “Egg Party” bolstered NetEase shares by over 40% this year.

JPMorgan analysts cautioned that the debut of “DreamStar” might impact NetEase’s revenue by 2% to 3%, prompting a downward adjustment in their revenue projections for NetEase in the next two quarters by 4% and 5% respectively.

Projections indicate “Egg Party” is poised to rake in an annual revenue between 7 billion yuan and 8 billion yuan ($980 million and $1.1 billion) this year, as indicated by a Goldman Sachs report.

Goldman Sachs anticipates “DreamStar,” positioned as Tencent’s counterpart to “Egg Party,” to generate between 5 billion and 6 billion yuan in its inaugural year.

NetEase’s market capitalization soared to $67 billion, recently surpassing food delivery giant Meituan (3690.HK) to claim the position of China’s fourth-largest internet company.

Tencent, holding its status as China’s largest internet company, dominates as the world’s leading video game provider and operates WeChat, China’s foremost social networking app.

In the face of escalating competition from developers like NetEase and miHoYo, the creator of “Genshin Impact,” Tencent has sought new gaming sensations.


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