In a surprising turn of events, Tencent has canceled developing a new mobile game based on the popular Nier franchise from Square Enix. This decision, reported by Reuters in December, comes after nearly two years of development.
Sources familiar with the situation revealed that the project, which was yet to be announced, had progressed significantly. It even boasted a playable internal demo, highlighting its engaging story and combat mechanics.
However, Tencent faced a major hurdle: finding a suitable monetization model. The challenge of justifying the high development costs and the licensing fees, estimated to be between 15% and 20% of the revenue, led to the project’s cancellation.
This move doesn’t mean layoffs at Tencent, as employees are being reassigned to other departments. The cancellation is part of a series of setbacks for Tencent’s gaming division, which has struggled to produce a significant mobile gaming hit in the past five years.
The company had aggressively acquired licenses for popular franchises like Nier to outpace competitors like NetEase.
Tencent’s president, Pony Ma, acknowledged last week that the gaming division was underperforming. Despite this setback, Tencent has plans to launch mobile games in 2024 based on well-known IPs, including Assassin’s Creed, Need for Speed, and Delta Force.