Qualcomm, Tencent agree to cooperate on gaming devices and 5G

by Stephen Nellis

(Reuters) – Qualcomm Inc and Tencent Holdings Ltd <0700.HK> said Monday that they will cooperate on projects that could include improving the playback of the Chinese company’s video games on devices with Qualcomm chips and creating a 5G version of a Tencent-backed gaming phone.

Qualcomm is the largest supplier of mobile phone chips, which power many Android devices. With a market capitalization of about $453 billion, Tencent is China’s largest mobile software company and owner of WeChat, the nearly ubiquitous social network.

Tencent, one of the world’s largest gaming companies, reported sharply lower profits last year after the Chinese government stopped approving games for several months. Tencent received permission to release its main title Perfect World Mobile in the January-March quarter.

Under the deal, future Tencent games will be able to be “optimized” for Android phones equipped with Qualcomm’s Snapdragon Elite gaming chips, the companies said in a statement.

They have already collaborated on a gaming phone. Earlier this month, Tencent joined forces with its gaming device division <2357.TW> of Asustek Computer Inc., Republic of Games, to introduce a gaming phone with a Qualcomm chip.

Tencent and Qualcomm also plan to jointly develop a 5G-enabled version of the gaming phone, which could help advance Tencent’s plans for a game streaming service.

The faster connection speeds of 5G devices could enable streaming of more complex games to mobile devices. Microsoft Corp based in the USA and by Alphabet Inc. Google has also launched game streaming services.

“Mobile gaming, an important use case for 5G, will soon benefit from next-generation connectivity,” Qualcomm China president Frank Meng said in a statement.

“Faster speeds, greater bandwidth and cutting-edge, ultra-low latency will support real-time, multiplayer and immersive gaming.”

Tencent is working on a cloud-based back-end service called Instant Play that game developers could use to stream games. Microsoft offers a similar service on its Azure cloud computing service.

Tencent hasn’t revealed plans for its consumer-facing streaming service, but many analysts expect it to.

The collaboration agreement could also include refining game titles for U.S. laptops powered by Qualcomm processors and connected to the Internet via 5G rather than traditional Wi-Fi chips.

(This story has been refiled to correct day of week in first paragraph)

(Reporting by Stephen Nellis; editing by Richard Chang)