Wang Sen (not his real name), a person familiar with the matter, told China Business Daily that from the perspective of Tencent, the big money owner behind it, of course, hopes that the two companies will merge, which can avoid a lot of resource overlap and internal friction, and can work together with the outside world. However, Liu JIEHAO, an AI media consulting analyst, believes that “the growth rate of users of douyu and Huya has shown a weak trend, and the user overlap rate of the two platforms is very high, business convergence, and the merger will help to reduce vicious competition.” < p > < p > at the same time, Liu JIEHAO pointed out that if Tencent promotes the successful merger of tiger teeth and fighting fish, Tencent will take the lead in the game live broadcasting industry, and its position in the industry will be more stable. < p > < p > douyu recently announced that its board of directors has received a preliminary non binding proposal from Tencent, proposing that douyu and Huya should be merged for share exchange. Huya or its subsidiaries will acquire each issued common share (including common shares represented by American Depository shares) of douyu, and douyu shareholders will receive the agreed number of new class a common shares issued by Tiger tooth 。 Huanju group (NASDAQ: YY), which holds about 30% of Huya’s shares, also announced on the same day that it would transfer 30 million shares of class B common shares of Huya to Tencent at a price of $810 million. < / P > < p > the reporter contacted Betta and tiger teeth to understand the progress of the merger. They were told that everything was subject to the announcement. Among them, the betta side said that the company’s board of directors had just received the letter of proposal, which had not been carefully reviewed and evaluated, and no specific decision had been made. Dong Rongjie, CEO of Huya, said in an open letter that the board of directors of Huya had not made any decision in response to Tencent’s preliminary non binding proposal on the merger of tiger tooth and Betta Fish, and would carefully review and evaluate the proposal and make the best choice for the company, shareholders, especially employees. Liu JIEHAO, an analyst with AI media consulting, told reporters that Tencent officially controlled Huya in April this year, with its voting rights increased to 50.1%, which means Tencent has officially become the largest shareholder of Huya and douyu platforms. Tencent this time intends to match the merger of the two, it is reasonable. < / P > < p > according to public data, Tencent has invested in Betta since 2016, leading the investment of US $100 million in round B and RMB 1.5 billion in round C. in March 2018, Tencent invested another US $630 million (about RMB 3.98 billion), so far it has owned 37.18% equity of Betta, becoming the largest shareholder. Also in 2018, Huya also received $460 million of Tencent’s investment, accounting for 29.58% of Huya’s equity. By April 2020, Tencent will invest another $260 million to increase its holding of Huya to 37% and 50.1% of voting rights. < p > < p > Wang Sen, a person familiar with the matter, said that Tencent’s promotion of the merger was mainly due to the competition between tiger teeth and fish fighting, the current pattern of the game live broadcasting industry and the large layout of Tencent’s game business. Tencent is the largest shareholder of Huya and douyu, but the competition between the two sides has produced huge consumption, but there is no winner with huge advantages. At this time, the merger is more conducive to stable status and can work together to compete with other platforms. < / P > < p > on the other hand, “Penguin E-sports has accumulated a certain number of users based on Tencent’s own social channels. The merger of tiger teeth and fighting fish will not have a great impact on penguin E-sports in a short time. However, the cooperation of several platforms outside Tencent system in content and activities is becoming closer and closer. In terms of game business layout, the merger of tiger teeth and Betta will further enhance Tencent’s voice in the market, including distribution and user operation, which will also achieve more efficient operation. ” Liu JIEHAO said. < / P > < p > different from the merger cases of Internet companies such as didi hekuai, meituan and Dianping, 58 Tongcheng and ganji.com, douyu and Huya have achieved profits at present. < p > < p > according to the latest financial report of the second quarter of 2020, Huya achieved a revenue of 2.697 billion yuan, a year-on-year increase of 34.2%; under the non-U.S. general accounting standards, the adjusted net profit was 351 million yuan, with a year-on-year increase of 106%. In the second quarter of 2020, the company achieved revenue of 2.508 billion yuan, a year-on-year increase of 33.9%; net profit of 323 million yuan, a year-on-year increase of 513.7%, which created a new record in the history of the company. < / P > < p > on the one hand, bright financial data has boosted the confidence of the live video industry. On the other hand, Betta and tiger teeth will also face the pressure of short video players to encroach on the market. < p > < p > since July last year, the competition in the live game market has become increasingly fierce. In July 2019, Kwai game live mobile terminal reached 35 million. Station B is also the opponent of fighting fish and tiger teeth. Recently, the business of station B has been further diversified, including live broadcasting business investment, attracting relevant teams, and spending a lot of money to buy games and game copyrights. Now, the pace of station B is accelerating. Besides, the bytes of beating the huge flow cell backed by the loud voice are also highly distributed into the game and play a good role in the tiktok business. With the continuous addition of new players, it is more difficult for the growing user pool to grow, and the competition will only be more intense in the future. < p > < p > Liu JIEHAO told reporters that if Tencent promotes the successful merger of tiger teeth and fighting fish, Tencent will take the lead in the game live broadcasting industry, and its position in the industry will be more stable. In terms of content and anchor, the combined resources will be more abundant and attract more users. With the tiktok, Kwai, and fast rising of the platform, the market of the live broadcast field is divided, which threatens the growth of the number of users of tiger teeth and fighting fish. The B is a big threat. The user growth rate of Huya and douyu has been weak, and the user overlap rate of the two platforms is very high, and the business convergence. The merger helps to reduce the vicious competition, so as to better coordinate with the outside world. Wang Sen told reporters that the merger will not take place in a short period of time. On the one hand, it is because of the epidemic situation, on the other hand, the tension between China and the United States is also a factor. Many Internet companies are also considering the issue of returning to Hong Kong shares and have done a lot of work. < / P > < p > “unless there is a big variable, it will be merged under normal circumstances. It is mainly about who will dominate the future merged company, namely, douyu and Huya. The name of the brand is like Youku and Tudou. After the merger, the potatoes will disappear and only Youku will be left. ” Wang Sen said, “the gap between the two countries is not so obvious, so it is very important to run in before the merger, that is to make sure that all aspects are settled, and then put forward a peaceful plan.” However, Ding Daoshi, President of fastway Research Institute, believes that there is not a big gap between douyu and Huya, and that the merger is more of a company system level merger. The products will run independently within the Tencent system, and the two platforms will exist at the same time. “After the merger, Tencent will definitely take the strategic lead, or adopt the joint CEO system, with the current CEOs of douyu and Huya serving as the co CEO, or Tencent will send senior executives as the responsible person.” < / P > < p > at present, for most of the live broadcast platforms, the technology itself has no threshold, and the focus of users is mainly on the anchor. In the initial stage of the industry, the anchor has become an important resource for the platform to scramble. In order to compete with competitors and gain the right to speak in the market first, the platform offers high proportion of shares, high base salary and task bonus to the anchors, and the industry frequently shows high value anchors. However, as the industry gradually returns to rationality, anchor resource capital investment begins to cool down. At present, the investment cost of platform operation mainly includes bandwidth, infrastructure investment, marketing cost, etc. < / P > < p > in addition, with the wide application of 5g, technological innovation is also the investment focus of the platform, which will also be an important part of determining the future core competitiveness of the platform. < / P > < p > “from the perspective of pattern, as an important content industry track, live game still has strong attraction and new opportunities. On the one hand, B station, Kwai Fu and other cutting-edge platforms expand the live broadcast business and continue to increase investment. Liu JIEHAO said, “on the other hand, many entertainment live broadcasting platforms, such as kugou live broadcast, now live broadcast, iqiyi and other entertainment live broadcast platforms, also extend the game live content and build a diversified live content ecology. The competition in the second half of the game live broadcast is still very fierce.” < / P > < p > according to the data, the game live broadcasting industry will still maintain a growth rate of more than 13% from 2018 to 2022, and the scale of the live game market will reach about 30 billion yuan by 2022. Generally speaking, the live game market is still on the rise, and the rapid growth in the first half of this year also shows that this is an important demand for mass home entertainment. However, growth is expected to slow in the second half of this year. < / P > < p > the people familiar with the matter said that after the merger of Huya and douyu, it will be more advantageous to establish a complete and high-quality content output platform. Only by ensuring that we have strong competitiveness in the content, can we be in the forefront of the industry. The merger of the two sides will promote the content quality progress of the game industry, and the whole industry will develop in the direction of benign competition.