Shares of Tencent Holdings (OTC:TCEHY) surged in their biggest rally since December following the company's announcement of an earlier-than-expected launch date for one of this year's most anticipated mobile games.
The Chinese tech giant revealed on Monday that "Dungeon and Fighter: Origin," the mobile version of the highly successful "Dungeon and Fighter" computer game, will be released on May 21 after seven years in development.
Tencent shares popped more than 5% in Hong Kong.
Developed by Korean company Nexon, this action game adaptation is part of Tencent's effort to secure a new blockbuster title amidst a backdrop of regulatory restrictions that have impacted gaming durations and slowed progress in the industry.
Although the success of DnF Mobile isn't guaranteed, as it faces competition from popular titles by ByteDance Ltd. and Genshin Impact's creator Mihoyo, investors are optimistic that the well-established franchise will prove to be profitable.
“We expect gaming revenue to turn around in 2Q24,” analysts at Jefferies said in a note. They project that the game could generate 6 billion yuan ($828 million) of revenue annually.
“Apart from DnF, Tencent has a number of emerging franchises to drive future growth,” they said.