Tencent Holdings (0700. HK), the Chinese social media and gaming behemoth, announced on Thursday that it will close its Penguin Esports operation by early June as part of a restructuring effort following a regulatory crackdown.
After six years of operation, the company said it has decided to close the platform, which was similar to Amazon’s (AMZN.O) Twitch and allowed users to live-stream themselves playing video games.
The company said the decision was made due to “changes in its commercial development plan.” It didn’t go into detail. Beijing last year rejected the company’s bid to establish a $10 billion videogame streaming giant by merging the market’s top two players, Huya (HUYA.N) and DouYu, on the grounds that it violated antitrust laws.
During that time, Huya stated that it intended to merge Penguin Esports into a new entity as well. Over the last year and a half, a broad-based Chinese regulatory crackdown has targeted digital giants, pushing them to overhaul once-common market practices and compelling Tencent (9988. HK) and rival Alibaba Group (9988. HK) to develop layoff plans. The Chinese company Tencent announced on Thursday that Penguin Esports has ceased accepting new members or live-streaming hosts and that existing users would no longer be able to top up their accounts with immediate effect.
The software will be deleted from all app stores and will cease to function by June 7, according to the company. Tencent has also discontinued a number of products in recent months, including its e-commerce site Xiao’e Pinpin, which was discontinued in February. As part of the move, Tencent suspended services for video games such as Epic Games’ smash-hit Fortnite, which the company had intended to release in mainland China.