Welcome back to Jaggy’s Corner which is my weekly post about the gaming industry for both its good and bad things. I know that a lot of gamers will agree that 2019 was abysmal at best, with multiple issues like the President of the United States blaming video games for violence, Blizzard banning a couple of people because of anti-Chinese statements made during a tournament broadcast, and the train wreck launch of Anthem. Let’s not forget about the giant expose done on Riot Games and sexism in the industry (which went to court. This led to women workers receiving a payout that seemed too low, in my opinion. Recently, new information has come to light about that court case against Riot and I’ll address it in another article.)
This week I’d like to talk about something that crossed my purview a couple of days ago. On January 29th, Phoenix Labs was acquired by Garena, a Singapore based company that is known for League of Legends, Arena of Valor, Free Fire, and PUBG Lite. Their specialty is mobile gaming.
The question on everyone’s mind is: why did it happen? Especially considering that Dauntless, the free to play Monster Hunter game, is distributed by Epic Games. But, when I looked further into the topic, I discovered that this business deal makes a lot of sense.
Let’s first start with Phoenix Labs, the Canadian developers of Dauntless. Based on a public statement made by the CEO, Jesse Houston wanted to bring their game into the hands of every player. Presumably, this is part of the reason they made a deal with Epic Games in the first place. In fact, that isn’t speculation, what I just said is a fact. Right from the horses’ mouth, Jesse Houston talked to gameindustry.biz at GDC last year about their partnership with Epic.
“I’ve had this vision for Dauntless since the get-go, of One Dauntless [the game’s single account system across all platforms],” he says. “Wherever you are, whoever you want to play with, whatever device you want to play on, you can. This was even before Epic started doing the cross-platform play stuff. So Epic said they were doing cross-platform play and offered to teach us the ropes.”
Another point to consider is that in early 2019 Phoenix Labs acquired Bot School Inc. This was done to help Dauntless get into the hands of as many players since they have experience with social networking (near as I can find). So far, Phoenix Labs have stayed true to their vision. As a result of the deals with Bot School Inc. and Epic Games, Dauntless has reached over 15 million players.
The logical next step for Phoenix Labs would be to expand into mobile gaming like other companies before. (Notably, Blizzard and ArenaNet in recent memory.) The mobile market is exactly the area that Phoenix Labs wants to expand into and Garena can provide their expertise. Plus, Garena has worked with Phoenix Labs before this partnership ever took place so, it was a no-brainer.
Garena is a digital entertainment company and one of the largest forces for gaming in Southeast Asia. More importantly, they are one of our longest-running investors – one that we’ve considered a close partner for years. – Source: Jesse Houston
Now, for those of us that have done some digging into Garena, another reason for this partnership might spring into focus. It’s not just an investment and marketing deal, it also has to do with Tencent. (I know, I know, but it makes a lot of sense in the long run. Just stick with me here…)
In November of 2018, Tencent entered a partnership with Garena. Part of the reason this was done was most likely because China imposed restrictions on video games because of the rise in myopia. For those unaware, myopia is the medical term for near-sightedness in people under the age of 40. In China, more than half of the population is affected by this condition. Because the numbers have risen so high, the Chinese government had to do something. So, they imposed massive restrictions (like requiring players to enter their age so that the game would begin a time limit) that were high enough to stop many companies from being granted videogame licenses.
Up until that point, Tencent was making huge profits and when the restrictions were imposed sometime in 2018, Tencent for the first time in years was losing out. (There were other reasons for this, but no need to get into that right now.) The only way they could continue to be successful was to distribute their games in other countries without these restrictions. Thus, Garena and Tencent entered a partnership in November of 2018 like I previously mentioned.
Now, China has since lifted some of its restrictions on game licenses, so it stands to reason that Tencent is will be fine. But, what I can say is that Garena will be able to put Dauntless in the hands of a larger customer base because of its proven track record.
Remember the statement above where Jesse Houston said that he wanted to bring the game to everyone? Well, this is exactly how his goal will be achieved.
I remain optimistic that Garena and Phoenix Labs will continue to bring the free to play monster hunter game the best player experience. Though players might discover more free to play business models, like the relatively recent addition of a season pass and microtransactions. So long as the developers keep away from highly predatory practices like loot boxes, then I am not worried about the current future of Dauntless.
I’m sure many people aren’t going to be happy with the news with Phoenix Labs and Garena, but hopefully, this article has put things into perspective.
As a slight sidestep, if I could offer up another piece of information that might help to ease the minds of what sort of company Tencent is, they have donated $432 million USD to the Hubei and Wuhan provinces to aid in the current chaos surrounding the coronavirus. But ultimately, you guys decide for yourselves how you feel about the acquisition of Phoenix Labs by Garena.