On June 19, the operational team of Tencent's "Dungeon & Fighter: Origins" (hereinafter referred to as "DNF Mobile") announced: "Due to the expiration of contracts, from June 20, DNF Mobile will no longer be available on certain Android app stores and will instead be downloadable from the official website".

The announcement mentioned that Tencent had notified members of the "Hardcore Alliance", including Huawei, OPPO, vivo, and Xiaomi, that the DNF Mobile packages in their app stores would cease to be updated.

However, insiders revealed that Xiaomi is not included in the channels that will stop updates. The real situation is that the contract has expired, and the product's distribution strategy has been adjusted.

As of now, the DNF Mobile download channel has already disappeared from vivo's app store.

Developed by Korean game company Neople and operated by Tencent, DNF's PC version entered Chinese market in 2008 and has since captured the hearts of many domestic players.

On May 21 this year, after nearly four years of preparation, DNF Mobile was officially launched in major app stores. On the day before the launch, during the pre-download period, DNF had already topped the iOS free charts and even pushed the "DNF Assistant" app to surpass Douyin and rank second. On the day of the public beta, it took only six hours to top the iOS sales charts and continued to dominate the charts for 28 days.

In the last 11 days of May, the game's revenue in the domestic iOS market exceeded the combined revenues of "Honor of Kings" and "Peace Elite", contributing to a 12% growth in Tencent's mobile game revenue for the month of May.

Disproportionate Revenue Sharing

Currently, DNF Mobile is Tencent's first mobile game to be removed from some Android channels. The official reason for the removal has not been provided yet. However, professionals have pointed out that Tencent's move is related to the current unequal revenue sharing ratios in the gaming industry.

Generally, when game developers distribute their games on app platforms, they need to pay a certain percentage of their revenue to the channel, known as the "channel tax". It is understood that the commission rate for the App Store and Google Play is 30%, while most Android app stores have a commission rate as high as 50%.

The "Hardcore Alliance (M.H.A)" is a mobile internet value-added service organization composed of leading domestic smartphone manufacturers. When the alliance was established in 2014, members agreed with game developers on a "50:50" revenue sharing ratio. Under this pressure, the profitability of game developers has been greatly squeezed, exacerbating conflicts between the two sides.

Xindong Company CEO and TapTap founder Huang Yimeng stated on social media: "A good product can succeed without going through channels, and there's no reason to give a share to the channels".

Previously, NetEase CEO Ding Lei also mentioned in an earnings call that the 50% revenue share on domestic Android platforms is the highest in the world and unhealthy.

Changing Distribution Channels

Tencent is not the first company to be dissatisfied with this revenue sharing ratio.

In 2020, miHoYo's "Genshin Impact" had a conflict with Xiaomi's app store over revenue sharing and eventually decided to bypass the channel, achieving great success. In 2021, the game reached a 70:30 revenue sharing agreement with the platform, breaking the fixed 50:50 sharing model in domestic Android channels and initiating a trend of game developers opting out of Android channels.

Since 2023, miHoYo's "Honkai: Star Rail", NetEase's "All-Star Streetball Party", and Kuro Game's "Wuthering Waves" have all avoided Android channels and turned to platforms like the App Store, TapTap, and official websites.

For a long time, major smartphone manufacturers' official app markets and third-party app markets have coexisted in the distribution channels of the domestic Android system. Among them, the "Hardcore Alliance's" "business sharing" model allowed game developers to publish games in all alliance members' official markets through a single interface.

However, the market environment has now changed, with more and more users opting for diverse download channels. The rise of game community forums, public accounts, and content platforms is signaling the decline of traditional "shelf-style" distribution.

On June 18, Morgan Stanley released a research report stating that the overall environment of the gaming industry has changed, and Tencent holds a favorable position. The report also noted that DNF Mobile is one of the largest games Tencent has released in recent years and could be a key catalyst for the growth of Tencent's domestic gaming business in the second quarter. The game is expected to generate a total revenue of 10 billion yuan in its first year.