Tencent Games, the giant in the mobile gaming industry, has stirred the gaming community with the recent cancellation of an undisclosed Nier mobile game, leaving enthusiasts and gamers disappointed. The project, which had been under development for nearly two years, was abruptly halted in December 2023, according to reports from Reuters.

Speculations abound regarding the reasons behind this unexpected move, with many attributing it to Square Enix's decision to discontinue a popular gacha title from the same franchise on April 29, 2024. The abrupt conclusion of Tencent's project has raised questions about the intricacies of the gaming industry's dynamics and the challenges faced by major players.

Sources reveal that Tencent's decision to terminate the unannounced Nier game is rooted in a struggle to devise an impactful monetization model. The combination of high development costs and franchise rights expenses led to an impasse, ultimately forcing Tencent to pull the plug on the project.

Tencent Games, known for its collaboration with Square Enix in developing the "Final Fantasy" franchise, has maintained a tight-lipped stance on the matter, as have Square Enix representatives. The silence from both entities adds an air of mystery to the situation.

This abrupt cancellation marks a significant setback in Tencent's decade-long strategy of adapting popular games into mobile versions. With the mobile gaming industry's growth slowing down and development costs soaring, the negotiation landscape for popular intellectual properties has become challenging.

According to recent reports, royalty fees, typically ranging from 15 to 20% of sales, became a point of contention. Tencent's willingness to pay under 10% in recent negotiations showcases the strain on profit margins within this particular strategy.

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Tencent’s gaming business, which contributes more than 30% of the company's revenue, has faced challenges recently, with some of its games failing to meet expectations, as highlighted by Chairman Pony Ma. Despite the cancellation, no job losses are anticipated, as affected employees will reportedly be transferred to other units within the company.