A preliminary non binding proposal on the merger of the two. From August 10 to August 12, the second quarter financial reports of three listed companies have added more footnotes to the merger. In the history of business, the merger of the top two industries usually means the end of a competitive era. However, history has proved many times that “cooperation of strong and powerful” often does not mean the final outcome. < / P > < p > the combination of Betta and tiger tooth is not surprising. The suspense has always been time. Until August 10, Tencent’s proposal put the merger on the agenda. < p > < p > according to the reporter of China times, after purchasing 16.5238 million ordinary shares of Huya for us $262.6 million in April this year, Huya, which is 50.1% of the voting rights held by Tencent, has been incorporated into the financial report of Tencent holdings. Tencent will hold 51% of its shares and 70.4% of its voting rights after acquiring 30 million shares of class B common shares from huanju times and 1 million shares from Dong Rongjie, CEO of Huya. Betta is more independent than tiger tooth. According to public information, Tencent has participated in round B, round C and round e financing of Betta respectively since 2016. At present, Tencent holds 38% shares and voting rights in douyu, making it the largest shareholder. < / P > < p > it is reported that the management of the betta will take over the new company. The news was not confirmed by the parties. But to some extent, the rumor shows that the fighting fish management has the chips to stay at the table longer than tiger teeth. As of the first quarter of this year, Chen Shaojie, founder and CEO of Betta, is the second largest shareholder of Betta, holding 14.7%%. Including him, the betta management holds 16.8% of the shares and voting rights. According to the data released at the end of April this year, the management of Huya held 8.9% of the shares and 2.1% of the voting rights. Among them, Dong Rongjie holds 5% of the shares and 2% of the voting rights. But the sale of Dong Rongjie’s 1 million shares of class B common stock means that the discourse power of tiger tooth management is further weakened. < / P > < p > the two companies have different attitudes towards merger. After the official propaganda merger, the betta did not make any public statement. On August 11, a Betta related personage responded to the reporter of China times, saying that all matters concerning the merger shall be subject to the announcement. Dong Rongjie issued an internal letter on August 11, saying that Huya would consider issuing additional shares and purchase all shares of douyu with Huya shares. He also stressed in the internal letter that the company’s board of directors has not made any decision and that “management will continue to work with you.”. < / P > < p > in addition to holding the right to speak at the equity level, reducing the competition and internal friction between douyu and Huya is also considered as one of the reasons for Tencent to promote the merger. < / P > < p > fighting fish and tiger teeth were both born in 2014. In January of that year, Acfun live broadcast was officially renamed as Betta live broadcast. In November of the same year, the YY live broadcast of the happy gathering era officially changed its name to live broadcast of tiger teeth. < p > < p > in May 2018, Huya first went to the United States to be listed, becoming the first share of domestic game live broadcasting companies. 14 months later, the betta landed on the NASDAQ. But around who is “the first in the game live industry”, as well as the competition between the host and the user, the two are constantly fighting. < p > < p > < p > Eric analyst Wu Baokang told the China times that there are homogeneous competition between douyu and Huya in terms of live content, development mode, cloud game platform, live delivery and other innovative businesses. In addition to reducing competition between platforms, he also believes that after the merger, the new company will have more say in purchasing the rights of E-sports events and signing up for anchor, so as to reduce costs. < / P > < p > it’s not just the business model. Judging from the newly released second quarter financial report of this year, a number of financial data of the two companies are almost the same. Liu JIEHAO, an analyst at Ai media consulting, also believes that from various data and actions, today’s tiger teeth and Betta are becoming more and more “like” and “the friction generated by the merger is relatively small”. Examples of < / P > < p > come at your fingertips. In terms of revenue, the revenue of Betta in the second quarter of this year was about 2.508.2 billion yuan, and Huya was about 200 million yuan more than it was, but the growth rate was about 34% year on year. Live broadcast revenue accounts for more than 90% of the revenue of the two companies, while advertising and other business revenues are hovering below 200 million yuan. In terms of profit, the net profit of the two companies under non GAAP is more than 300 million. The gross profit margin under non GAAP also fluctuates around 21%. The total Mau of both companies is close to 170 million users. < p > < p > in fact, Chen Shaojie once commented on the competition between douyu and Huya in the telephone conference of the second quarter report of douyu in 2019: “the difference between the two companies is very small, because everyone is doing live games.”. Aurora big data also shows that the coincidence rate of users of douyu and Huya will be 31.6% in June 2020. < / P > < p > regardless of the status of douyu and Huya’s major shareholders, Tencent is still the key “home” of douyu and Huya live broadcast industry chain. According to the reporter of China times, at present, the game live broadcasting industry has formed a complete industrial chain covering game copyright, E-sports events, live broadcast platform, and then to guilds and anchors. < / P > < p > game copyright is the premise of all links. At present, the most popular games on the live game platform, such as League of heroes, peace elite and King’s glory, belong to Tencent. Tencent’s advantage also lies in the persistence of classic popular games. “The most popular” League of heroes “was a game ten years ago Some insiders told reporters. < p > < p > Tencent holdings released the financial report of the second quarter of 2020 on August 12, which also shows the importance of game business to itself. Tencent’s game revenue in the current period was 38.288 billion, accounting for 33% of the total revenue of Tencent holdings in the current period. Tencent’s game revenue increased by 40% year-on-year in the current period, but the total revenue of Tencent increased only 29% year-on-year. Tencent said in the financial report that the growth of game business was mainly driven by the increase in revenue of domestic games including peace elite and King’s glory and smartphone games in overseas markets. < / P > < p > but it should be mentioned that Tencent also has its own game competition live broadcast platform Penguin E-sports. It has been reported that Tencent’s inter entertainment business group (IEG) has set up an organization similar to “live media” to coordinate the relationship between Betta, tiger tooth and Penguin e-sports, and to limit the anchor’s “job hopping” behavior in the above three platforms. But for the “China Times” reporter’s related questions, as of the press, Tencent has not responded. < p > < p > Liu JIEHAO told China times that Penguin E-sports has accumulated a certain number of users based on Tencent’s own social channels, and the merger of tiger teeth and fish fighting will not have a great impact on it in a short time. He predicted that the cooperation among the following major platforms in content, activities and other aspects will become closer. “In terms of game business layout, the merger of tiger tooth Betta will further enhance Tencent’s voice in the market for game content, including distribution and user operation, which will also achieve more efficient operation.” < / P > < p > as of August 13, the shares of douyu and Huya were down about 2% and 4% respectively. The bigger drop came at the end of August 10. Huya shares closed at $24.04, down 9.83%. Betta shares closed at $13.97, down 8.51%. The two stocks rose between August 11 and 12, but the highest one-day gain was 3.29%.
Liu Jiehao told Kwai Times reporter that with the rise of BiliBili, jitter, tiktok and other platforms, the market of game live broadcast was divided, and the growth of users of tiger teeth and fighting fish was threatened. The growth rate of tiger tooth and fighting fish has already been weak. < / P > < p > traffic is one of the key indicators of the live broadcast platform. From DAU (the number of active users per day), last June, Tencent, who also had a background in investment, announced its first 35 million Kwai live DAU live. By the end of November, it had risen to 51 million. For reference, data released by Quest mobile showed that as of June 5 last year, daus of Betta and tiger teeth were 15 million and 11 million respectively. < p > < p > the second quarter financial reports of the two enterprises also showed signs of weak user growth. In particular, the total Mau (monthly active users) of Betta in the current period was 165.3 million, with a year-on-year increase of only 1.5%. In addition to the high price of signing the “one fish sister” von Ti Mo,
announced the exclusive broadcast of the “Heroes League” global competition in mainland China for 2020-2022 consecutive three years in December last year. B The price is said to be 800 million yuan. < p > < p > according to the consulting data of iResearch, the revenue of China’s live game industry will reach 20.81 billion yuan in 2019, with tiger teeth and fighting fish occupying 40.25% and 35% market shares respectively. This means that once tiger teeth and fighting fish merge, there will be a live game giant with a market share of nearly 80% and a total market value of more than 10 billion US dollars. < / P > < p > however, there are different opinions on whether the combination of douyu and Huya will become a giant in the live game industry. Dong Zhen, a senior analyst at Analysys, told the China times that the merger meant the complete end of the overall live game market, and that the vertical live game broadcast began to switch to a new track. However, Wu Baokang believes that after the merger of douyu and Huya, the game live broadcasting industry will still present a situation of common competition among multiple platforms, “market share will always change.”.