Tencent Says in Talks With Apple About Mini Games Mobile Revenue

(Bloomberg) — Tencent Holdings Ltd. acknowledged for the first time it’s in discussions with Apple Inc. about sharing the revenue that flows through its popular WeChat mini games, a potentially significant move for China’s mobile developer ecosystem.

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The Chinese company is exploring ways to offer in-app transactions via Apple’s iOS payment system, Chief Strategy Officer James Mitchell told analysts on an earnings call. Such a change would enable the US firm to begin taking a cut of in-game transactions.

Apple has begun ramping up pressure on Tencent and ByteDance Ltd. to make fundamental changes to China’s most popular apps, Bloomberg News has reported. The iPhone maker in recent months demanded the two companies close loopholes that their in-app creators employ to funnel users to external payment systems, circumventing Apple’s typical 30% commission, according to people familiar with the matter.

On Wednesday, Mitchell said Tencent does not monetize mini games via in-app purchases on iOS presently and discussions are underway to potentially enable the function, which would benefit developers, users, Apple and Tencent.

“We want to make it available on terms that we think are economically sustainable, that are also fair. And so that’s a discussion that’s underway, and we hope that the discussion leads to a positive outcome,” Mitchell said. “But in the event that discussion doesn’t progress, then the current status quo continues.”

WeChat sits at the heart of Tencent’s social media and gaming empire, and the all-in-one platform is shouldering a larger share of the burden for growth as divisions like cloud services struggle. Mini programs in WeChat, including games, are small pieces of software accessed through the dominant app, enabling things like booking travel tickets, paying bills and whiling away spare time playing. The company’s gross receipts from mini games increased more than 30% in the second quarter.