(Yicai Global) April 8 -- Penguin Esports will cease operating in June after nearly six years in business, the game-oriented livestreaming arm under Chinese internet giant Tencent Holdings said yesterday. The unit has failed to seize market share as growth in the sector slows, an analyst said.

Penguin Esports’ website, app and WeChat mini program will all be terminated on June 7, it said yesterday. The platform is no longer allowing the registration of new users and top-up payments.

The growth spurt of China’s e-sports industry has ended and the sector is now encountering a bottleneck, Liao Xuhua, an analyst at market consulting firm Analysys, told Yicai Global.

Founded in 2016, Penguin Esports offers game livestreaming services, including the broadcasting of e-sports competitions. However as of May last year, it only had 5.7 million monthly active users, according to data by iiMedia Polaris. By contrast, the two leading game livestreaming platforms Huya and Douyu, also backed by Tencent, had 60.7 million and 77.6 million MAUs over the same period.

Tencent tried to merge Huya and Douyu in 2020 and Penguin Esports would have been included in the consortium. But the merger was vetoed in July last year as the country’s anti-trust regulators deemed that Shenzhen-based Tencent would have too much control over the new entity.

Editors: Dou Shicong, Kim Taylor