Qualcomm, Tencent team up to expand digital entertainment offerings

San Diego-based chip giant Qualcomm and China’s Tencent Games will collaborate more closely in the field of digital entertainment in future, the companies announced earlier this month.

Together, the pair signed a nonbinding agreement to combine efforts and optimize a selection of mutually-beneficial projects.

These agreements include plans to include Qualcomm Snapdragon chips in Tencent-backed mobile gaming devices and game content, and to optimize hardware performance in cloud gaming, AR and VR and more.

The pair-up comes as industry and consumer interest in digital entertainment is booming.

Qualcomm makes the chips which power many mobile phones, especially those that run Android. It has also agreed to work with Tencent to improve the way that their in-house games such as Crossfire, King of Glory and Game for Peace run on the Snapdragon Elite gaming-targeted processors.

Qualcomm China Chairman Frank Meng said: "Mobile gaming, an important use case for 5G, will soon take advantage of the next generation of connectivity." He predicted that quicker mobile streaming could help Tencent's ambitions to launch its own streaming service for gamers called Instant Play.

Three months back, Qualcomm collaborated with Vivo and Tencent to develop a new AI system for use in League of Legends. The field of digital entertainment and e-sports in particular are becoming a major outlet for more sophisticated AI tech and faster chips.

The popularity of e-sports has led to a rapid rise in the number of players and fans. Recently, the 16-year-old Kyle Giersdorf won the first ever Fortnite World Cup in front of a packed audience at Arthur Ashe Stadium in New York. For that achievement, he netted a cool US$ 3m.

Meng added: “We are ushering in a new age of gaming.” He reiterated that mobile gaming was an important 5G use case with its fast speeds and low-latency.

According to both companies, the requirement for closer relationships across the mobile gaming industry is more important than ever. “We aim to develop popular, high-quality games that can be experienced by consumers across a variety of Snapdragon platforms and devices,” they said in their statement.

The latest agreement may also include tweaking games for U.S. laptops powered by Qualcomm processors while they are connected online via 5G, rather than through the more traditional Wi-Fi chips, according to the report.

The stock price of Qualcomm went up and then dropped slightly after the announcement, but then it largely regained its market closing value of US$ 74.97 a few hours later. Tencent’s stock rose slightly after closing to US$ 370.20.

Meanwhile, looking at the bigger picture, year-on-year Qualcomm revenues fell by 13% to US$ 4.9bn during the 3rd quarter of this year. Difficulties in China were named as the main culprit.

In particular, the company was hampered by Huawei’s gains in its home market. Qualcomm is one of the biggest suppliers for the likes of Oppo and Xiaomi and, but Huawei makes many of its own components – including processors.

Combined with the fact that many computer and phone manufacturers are taking stock of inventory as they prepare for the launch of 5G over the next year or so, and it was a challenging period for the firm.

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