14 Jan 2023: Huya changes its licensing agreement and what does it mean

I saw an announcement saying that huya has changed its licensing agreement with Tencent pertaining to the rights to be the exclusive party to stream games and having the rights to sublicense to others.

This immediate financial impact is that from a 500 million rmb amortisation switches to a 150 million rmb amortisation for such gamestreaming rights.

Financially, it has an immediate uplift and drastically reduces the operating expenses.

On a deeper level, I believe Huya is thinking of whether should it focus only on gaming streaming since it's a competitive field with players like Bilibili, kuaishou, douyu and possibly Tiktok's china subsidiary.

If it pivots, it has a level of uncertainty but to me, this level of uncertainty is good as it creates optionality for huya to find new revenue stream.

While it's mau is not at over 300 million level like that of Bilibili and iqiyi, it does have a decent following. If it capitalises on the existing volume, it could certainly find new revenue stream.

Will it do a koolearn? It is interesting to see.. will it delve into metaverse in addition to gaming streaming?

As always, this should not be construed as any investment or trading advice.

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