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HUYA Inc's 'Successful Transformation'? It's Just a Graceful Downsize

A three-year plan? Sounds like expansion, but in reality, it was contraction—clearing out, cutting costs, and seeking support. HUYA Inc shrank elegantly, but the capital market never pays for 'elegance.'

'Successful transformation'—in Q1 2026, HUYA Inc executives unusually uttered these four words during a conference call.

But the numbers rolled their eyes: annual revenue plummeted from 9.264 billion yuan in 2022 to 6.5 billion yuan in 2026, with a third evaporating outright.Even more subtle is the mobile MAU—which, after being stuck at 80 million for several consecutive quarters, this once-core metric was simply omitted from the Q1 2026 report.

Lin Songtao, the chairman who arrived at HUYA Inc with the three-year plan, did not personally announce the 'successful transformation,' leaving many to feel that the original storyteller no longer wished to continue the narrative.

01 New Bottle, Same Old Wine

The three-year plan did bring one change—the share of new businesses grew from less than 10% to 36%.

The business transformation was something Lin Songtao started talking about as soon as he took office in August 2023. His colleague Huang Junhong put it bluntly: 'The main goal is to increase game-related service revenue to 30% of total revenue within three years, creating a more balanced and diversified revenue structure.'

On the surface, HUYA Inc not only met the target but exceeded it with a 36% share, seemingly achieving its diversification goals.

But how much of that 36% is real?

‘Goose and Duck Kill’ launched in January 2026 and remained at the top of the iOS free games chart for most of the first quarter, reaching the top five on Apple's App Store local sales game rankings in April.

However, the quarter-on-quarter data was just 'average': new business revenue increased from 593 million yuan to 627 million yuan, a mere 6% growth. By comparison, Bilibili’s ‘Three Kingdoms: Destiny’ nearly doubled gaming revenue in its launch quarter, turning a loss into profit.The data from ‘Goose and Duck Kill’ doesn’t justify the term 'strategic transformation.'

HUYA Inc left an ambiguous statement: 'This success is mainly attributed to deepening cooperation with gaming companies.'

Investors are skeptical: when you say 'gaming companies,' are you referring to Gaggle Studios, the developer behind ‘Goose and Duck Kill,’ or Tencent, the major shareholder and key client?

In the past, HUYA relied on Tencent’s support for survival. In 2019, Tencent banned ByteDance apps from live-streaming its games such as 'Honor of Kings,' 'CrossFire,' and 'League of Legends' to promote its own platforms. During that time, some King of Glory streamers were forced to broadcast horror games, while HUYA’s streamers continued to attract fans and earn tips comfortably.

Now, the tipping model has lost its effectiveness, replaced by game distribution.

The 2025 annual report shows that the content costs paid by HUYA Inc to Tencent soared from 220 million yuan in 2024 to 350 million yuan.

In January 2026, HUYA Inc became the first platform in the industry to secure exclusive advance pre-sale rights for the FMVP skin of Honor of Kings. Not only Honor of Kings, but also exclusive co-branded skins and exclusive re-releases for PUBG and League of Legends.

The Spring Festival season was even more intense: the distribution revenue for QQ Speed Mobile, Peacekeeper Elite, and League of Legends Mobile on HUYA Inc increased by over 50% compared to the fourth quarter of the previous year.

Game-related services, advertising, and other revenues generated through cooperation with Tencent surged from 118 million yuan in 2023 to 478 million yuan in 2025. This revenue corresponds to the English term 'Game-related services, advertising and other revenues' in HUYA Inc's financial reports—precisely the core segment that HUYA Inc constantly refers to as 'strategic transformation' and 'diversified efforts'.

While new businesses have grown, the reliance on Tencent has also deepened.Relying on Tencent is not news; the news is that HUYA Inc still has to rely on another party.

02 Both legs are on someone else’s turf

HUYA Inc is no longer one of the 'two giants of game streaming.' Its current survival strategy involves having both feet firmly planted on others’ turf.

First, let’s look at the leg standing on Tencent’s ground.

Most of the games streamed on HUYA Inc, except for the outlier Goose Duck Kill, such as popular titles like Honor of Kings, Peacekeeper Elite, and League of Legends, are all under Tencent’s control. Whoever holds the copyright is the landlord. HUYA Inc is merely a 'content tenant farmer'—what you can broadcast and the revenue-sharing ratio are dictated by the upstream provider. Tencent extracts profits through copyright, while HUYA Inc can only pay the rent.

At least there used to be a protective wall. Tencent didn't authorize outsiders, keeping the live streaming traffic of 'Honor of Kings' and 'Peacekeeper Elite' within its own ecosystem, allowing HUYA Inc and Douyu to benefit.

This wall was torn down by Tencent itself in 2024 — it gradually opened up the live streaming rights of these games to Douyin.

The logic is simple: what Tencent wants is game penetration, more people playing, and more people spending money. Whether you watch on HUYA Inc or Douyin makes no difference to Tencent, as the money ultimately ends up in its pocket.

But for HUYA Inc, it's like the protective wall around the estate has been dismantled by the landlord himself.

Now let’s look at Douyin’s role.

Once the wall came down, Douyin's hundreds of millions of daily active users poured in. How big was the traffic? 'Goose and Duck Kill,' released in January 2026, surged to the top of the iOS free charts and generated over 30 trending topics across the web. Co-CEO Huang Junhong described it as “meeting expectations” during the Q1 earnings call, while COO Chen Peng called it a “social calling card for the younger generation,” with the entire management team dedicating significant time to discuss it. But everyone knows that behind this success were Douyin’s video snippets, secondary creations, and live stream collaborations driving the momentum. Without Douyin’s massive traffic boost, this game wouldn’t have exploded.

With the influx of traffic, people also migrated. Top streamers voted with their feet faster than agreements could be signed. Zhang Daxian and Bu Qiuren moved to Douyin at the end of 2023. Zhang Daxian’s debut garnered 60 million views, 1.2 billion likes, and fully activated three monetization channels: tips, ads, and product placements.

The final outcome? HUYA Inc accepted the situation.

HUYA Inc established a company called 'Huxiao Media,' signing its streamers under MCN contracts rather than exclusivity deals. HUYA Inc now seeks business partnerships externally, while streamers focus on content promotion, and after completion, they share revenue collectively, operating across multiple platforms.

HUYA Inc no longer insists that streamers belong exclusively to them; it has transformed itself into an intermediary. HUYA Inc is no longer just a platform but an MCN agency.

So its current stance is particularly straightforward:One leg stands on Tencent, deciding what products it can sell; the other leg stands on TikTok, determining how many users it can reach.It is no longer just a gaming live-streaming platform clinging to its small plot of land but more like a contractor shuttling between two giants, sourcing goods from Tencent's territory and attracting customers in TikTok's domain.

Standing with both legs on someone else’s ground may look stable, but in reality, there’s no other choice.

03 Overseas — Another story without numbers

HUYA Inc’s 'successful transformation' also has an overseas version.

The overseas gaming market is indeed tempting:

The global gaming creator economy reached $39.06 billion in 2025 and is expected to hit $49.3 billion by 2026, with a compound annual growth rate of 26.2%. The game streaming market hit $11.7 billion in 2025, also showing aggressive growth.

In the earnings call, 'overseas' was one of the most frequently mentioned terms. For three consecutive quarters in 2025, management repeatedly emphasized 'multiple-fold growth,' 'promising growth,' and 'future growth engine,' each time raising the tone higher than before.

HoweverAfter combing through the entire financial report, not a single line item disclosed overseas revenue separately.It is always vaguely lumped into the category of 'game-related services, advertising, and others,' mixed up with the domestic distribution of 'Goose Goose Duck' and the ad revenue sharing from Huxiao Media on Douyin.

How much did overseas markets actually contribute? No one knows. The so-called 'successful transformation' is all talk and no action.

So what exactly has HUYA Inc done overseas?

The only notable move was an $81 million gamble. In December 2023, HUYA Inc acquired a 'global mobile application service provider' for approximately RMB 570 million.

This amount was equivalent to 2.1 times HUYA Inc's net profit for that year. It was later revealed that this company was actually an overseas app store owned by Tencent.

HUYA Inc had big plans: relying solely on Nimo TV for live streaming was not enough. They needed to add game distribution capabilities to create a closed-loop synergy between 'live streaming traffic generation + app store monetization' and Nimo TV.

Unfortunately, ideals are always grand, but reality is harsh. The Apkpure that HUYA Inc bought for $81 million only made a brief appearance after the acquisition, representing just the last ten days of its standalone performance, with little relevance to HUYA Inc’s annual operations. As for Nimo TV, the actual overseas live streaming platform, its operational data was disclosed once in Q4 2021 (with over 30 million TAUs), and no separate data has been released since.

For the next four years, this figure never reappeared.

In China, HUYA Inc relies on Tencent and Douyin, while overseas, it blindly follows a path without daring to reveal its books. This is HUYA Inc’s 'successful transformation'—not walking independently, but leaning on others; not business expansion, but graceful contraction.

Conclusion:

Although the business has changed, its lifeline remains in Tencent's hands. New stories have grown, but profits were cut rather than earned. Claiming to walk on two legs, both are treading on someone else's turf. Overseas markets are described as growth engines, yet not a word about them appears in financial reports.

A three-year plan? Sounds like expansion, but it's actually contraction — clearing the field, cutting costs, and seeking strong alliances.

Over the past three years, HUYA Inc has reduced costs, slashed R&D, and cut back on marketing; overall revenue has also shown a declining trend.

This is not a successful transformation; this is — elegantly becoming smaller. And the capital market never pays for 'elegance.' What it wants is growth, and it has little patience for stories of contraction.

Author | Qian Duoduo, Liu Ran

Cover image source | AI-generated graphic

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