According to a recent Reuters report, an unannounced Nier Automata mobile game was canceled in December. Unnamed sources explained that, despite two years of development, Tencent had allegedly canceled the project following a failure to find a “compelling monetization model” due to the game’s “expensive development costs and franchise rights.”
Before its reported cancellation, sources claimed that the development of the Nier mobile game had a significant amount of content, including a playable internal demo that showcased revealed its story and combat designs.
Tencent has previously adapted other successful IP into mobile variants, but in recent years the Chinese company has struggled to find success despite the popularity of the mobile game industry. Sources explained that Tencent was struggling to pay IP rights for licensed games due to rising costs.
This news comes right after Square Enix’s announced it was ending Nier Reincarnation, another mobile game in its franchise, in April 2024.
According to Reuters, most royalty fees are 15% to 20% at a minimum. For platforms like the App Store, royalty fees can even rise to 30% alongside a 30% to 40% marketing and user acquisition fee. For Tencent, those sources claimed that the company would only take royalty fees below 10%. While this won’t likely cause an end to Tencent’s mobile game strategy, this may lead to the company pursuing other strategies to regain profits.
Both Tencent and original Nier Automata developer Square Enix have yet to comment on the situation. However, Tencent did acknowledge the recent shortcomings befalling the company on Monday, according to its chief executive and co-founder Pony Ma.
“…Gaming is our flagship business…But in the past year, we have faced significant challenges,” said Ma. “We have found ourselves at a loss, as our competitors continue to produce new products, leaving us feeling having achieved nothing.”
Regardless, this could bring into question the future of Tencent’s development of IP mobile games.
Hopefully, the company will see better profit margins with its other IP mobile games released in the near future, which include popular IPs like Delta Force, Need for Speed, and Assassin’s Creed.