What do PUBG, DOTA, League of Legends, Clash of Clans and Fortnite have in common, besides being some of the most popular online games across the world? They are all connected to Chinese internet media company Tencent, and could prove the latest and most effective prong in China's effort to extend its global influence through the use of soft power, and also supplant the US to achieve dominance in the gaming industry.
The US knows a thing or two about the soft power of video games. American-made games have been popular for a long time, displaced in popularity only momentarily in the past by the Japanese gaming explosion. In fact, history seems to be repeating itself now, with China becoming the new Asian giant to watch out for. It has been exercising its financial muscle in the gaming industry for more than a decade already, and now, it is slowly exerting its cultural influence.
Online gaming has the power to win friends and influence people, and this is the kind of soft power that can propel China in its journey to become the world's next big superpower. For in spite of their military might, countries like China are realising that hard power cannot extend the same kind of influence that economic clout, cultural influence and digital presence can wield.
What is hard power and soft power?
Jonathan McClory, creator and lead author of the Soft Power 30 Index, defines hard power as a coercive power, which involves one country ordering other countries to do what it wants by using force or the threat of force, or even by offering or withdrawing economic opportunities. On the other hand, soft power enables one country to get other countries to want what it wants through persuasion.
As the pioneer of this theory, political scientist Joseph Nye pointed out, nations that want to exert their influence over others will have to start looking at their intangible assets, which in Nye's framework included culture, political values and foreign policy. However, other factors like enterprise, cuisine, educational institutes, tech products and digital and social media platforms are just as likely to become a source of soft power, as China has realised in the past few years.
Why is soft power important, especially to China?
Considering the importance of soft power in improving a country's influence over the rest of the world, it is no wonder that countries are concerned about driving up their soft power quotient. Western nations have had a headstart in building soft power, but with Asian nations becoming more dominant since the 21st century, countries like Japan, South Korea and Singapore have kickstarted their soft power initiatives.
To become the next superpower, China needs to leverage the power of persuasion to convince other countries to accept it as a leader. This is important since China’s positive image is often overshadowed by what the Human Rights Watch see as examples of human rights abuse and media censorship in the country.
What is driving China's soft power?
The Elcano Global Presence Index and the Soft Power 30 Report — both global rankings of soft power — have noted China's persistent efforts to improve its rankings since the 2000s. Since 2007, the Chinese government has invested billions of dollars in various sources of soft power, such as the 2008 Beijing Olympics, its global Xinhua news agency, academic scholarships to foreign students, Confucious Institutes, and the Belt and Road initiatives, especially in Africa. These efforts have now presented the global image of China as a nation of deep culture and history.
But what about its unofficial soft power avenues? Even though the Chinese government has not put its might behind them, there are avenues of soft power, like China's business entrepreneurship and pop culture, which are perceived positively by the world. In fact, the past two decades have also witnessed the boom of an entrepreneurial China, especially its internet startup sector, with tech giants BAT (Baidu, Alibaba and Tencent) becoming entrenched in the country's culture and also firing popular imagination on a global scale.
And with these giants now investing in promising tech and media startups ranging from e-retailers and mobile wallets to popular mobile games, they could be bigger contributors to China's soft power than the country's official channels of influence. In fact, the Elcano Index notes that the huge jump in China's soft power index from 91.4 points in 2000 to 859.1 points in 2018 has been driven by information, technology and science more than culture, sports, education or cooperation. And no one company has exemplified the potential for China's soft power through entrepreneurship and gaming culture more than Tencent.
Tencent's silent and meteoric rise in the gaming industry
Tencent's almost godfather-like presence in the gaming industry is a result of early business acumen, strategic partnerships and astute investments. Tencent began its gaming division in 2003 with online games on its QQ platform but quickly broadened its reach to invest in rising gaming companies abroad and distribute popular global titles in China. By 2011, it had bought a 93% stake in Riot Games, the developer of the popular PC game League of Legends, and was hosting massively multiplayer online games like Call of Duty Online. In 2012, it acquired a 40% stake in Epic Games, the makers of Fortnite.
Though Tencent developed games right from the beginning, they were initially limited to the China market. In 2015, this changed. Tencent developed the Multiplayer Online Battle Arena mobile game Wangzhe Rongyao modelled on League of Legends. The game was released in China and was estimated to contribute about 50% of the Tencent's mobile gaming revenues in 2017. By 2016, an international version of the game, Arena of Valor, was developed by Tencent. It took the rest of the world by storm and was part of the eSport demonstration event at the 2018 Asian Games. And this year, Tencent adapted the popuar game PUBG into a government-approved clone for the China market by making it less violent. The game made more than $14 million within three days of its release.
Unlike attempts by China's government to improve its soft power and influence through formal initiatives and organisations, Tencent's influence in the gaming industry is subtle, informal and inclusive. By investing in gaming content across the world, adapting them to China's audiences, and then readapting them for global consumption, Tencent has acted as a bridge between a traditionally inward-looking China and the outside world. Unlike cultural agencies that require outsiders to make a significant effort to engage with them, Tencent enters the consumer's world through the ubiquitous smartphone and creates immersive story arcs and gaming environments that encourage easy interactions with the company's products. And by allowing creative freedom to the gaming companies it has invested in, Tencent has positioned itself as a benign monopoly that's unintrusive and democratic.
The future of soft power for China — Enterprise and Culture through Gaming
Enterprises act as a country's informal ambassadors, and leveraging Tencent's public image and value-generation capabilities could grow China's influence better than any formal initiative on the part of the government. While so far Tencent's efforts outside of China have been limited to acquisition led growth, the next step for the organisation would be to further utilise its capital to build up China's cultural influence through game design.
That China's pop culture strikes a chord with the outside world is clear from the success of films like Crouching Tiger, Hidden Dragon and the remake of The Karate Kid, as well as online wuxia novels. Arena of Valor's success is also an indicator that global audiences are ready for gaming content that is based on Chinese history and legends. In fact, Tencent recently agreed to work with Japanese game company Square Enix on original games based on indigenous Chinese content. If Tencent's acquisitions and partnerships are indications of the direction it will take in the future, China's soft power rankings look all set to climb in the next few years on the back of the gaming industry's efforts at furthering enterprise and pop culture.
If you’re interested in reading such content, subscribe here.