According to recent reports, Chinese tech giant Tencent is said to be diving into a mobile free-to-play rendition of "Elden Ring" - a trendy title from FromSoftware that rocked the gaming world in 2022. This tactical move follows Tencent's investment in FromSoftware of more than sixteen percent, done in August 2021.

According to the sources cited, Tencent has assembled a team of "a few dozen people" who will lead this massive undertaking.

Tencent has proven its competency in mobile gaming through monetization by adapting significant parts of game intellectual properties (IPs) into f2p versions. Notable examples include the widespread popularity of "PUBG Mobile" and 'Call of Duty: Mobile."

Nevertheless, despite these victories, the success of such adaptations remains tenuous because of problems with licensing deals.

Tencent Faces Challenges in Mobile Gaming Industry Amid Elden Ring Monetization Considerations

Licensing agreements for popular gaming IPs regularly necessitate royalty fees that fluctuate between 15% to 20% of total revenue depending on the volume of units sold. These fees must be paid alongside platform fees, such as the up to 30% commission imposed by platforms like Apple.

The financial dynamics of such arrangements pose challenges, and the outcome may depend on Tencent's ability to navigate these intricacies.

Tencent has had challenges in the mobile gaming industry. In 2019, the firm closed a mobile build of Apex Legends, its joint project with EA. Also, according to rumors, the Relic game - an unannounced phone title based on the Nier franchise and requiring almost two years for development was canceled because of a monetization issue.

Converting a game as massive and primarily single-player driven by Elden Ring to free-to-play is nontrivial, which Tencent will be able to comprehend.

The reports of a mobile version of Elden Ring emerged when Tencent confronted stiff competition from Chinese gaming rivals such as miHoYo and NetEase. These competitors have found success with titles like Genshin Impact and Eggy Party.

Pony Ma, the CEO and co-founder of Tencent, acknowledged the issues during the company's most recent annual meeting in Shenzhen. She stated that gaming is Tencent's main business, but it has had difficulties in recent years.

Tencent is taking a calculated risk by concentrating on incorporating its Hunyuan AI model into numerous facets of its company operations as a reaction to these difficulties. By making this change, Tencent may be better positioned for long-term success by increasing productivity and innovation across several industries.

No Official Statement Released Yet

Regarding the rumored development of Elden Ring's mobile version, Tencent has not yet provided an official statement. The key to this significant project is Tencent's ability to turn Elden Ring's complex and primarily single-player game into a lucrative, entertaining, free-to-play mobile game.

In addition, Tencent has to negotiate the highly competitive mobile gaming market, where effective monetization and adaption techniques are critical.

While Tencent faces challenges in China's game approval system, it may cause delays of months or years before a game is released. As the chairman acknowledges threats to its gaming business, the urgency grows for Tencent to secure new hits.

While legacy successes like "PUBG Mobile" maintain revenue strength, recent releases fall short of expectations.