Alibaba to give game developers 70 percent cut of sales

Alibaba promises developers they'll get the bulk of sales generated from mobile games sold on its platform, as the Chinese e-commerce giant ups the competition with rival, Tencent.

China's Alibaba has pledged to give the bulk of sales generated from mobile games back to developers, as it looks to gain an upper hand on rival, Tencent. 

The Chinese e-commerce giant tweaked its revenue-sharing model that would now give developers 70 percent of sales of their games, according to a report on South China Morning Post. Alibaba said it would keep just 20 percent of the proceeds, with the remaining 10 percent set aside to improve education in the country's rural areas. 

Game developers in China typically take only 10 percent cut from sales. 

"If the industry still keeps the 1:9 revenue-sharing model, the abnormal status quo of this industry won't be changed," spokesperson Wang Shuai said on Alibaba's Sina Weibo microblogging account. "We have to help to fight for a healthy environment for game development."

Its rival Tencent currently leads the Chinese online games market, leveraging its instant messaging app  WeChat to deliver mobile games to the company's 270 million monthly active users.

"We are unhappy with Tencent's monopoly in this industry, which has ruined the ecosystem," Wang said in the report.

Liu Chunning, president of Alibaba Digital Entertainment, added that its mobile games platform would be linked to the company's cloud computing offering  AliYun , as well as its e-payment platform Alipay .

The Chinese tech giant earlier this week announced plans to set up a mobile games platform, challenging a fast-growing market segment currently dominated by Tencent , which clocked 338 million yuan (US$55.38 million) from mobile games in first-quarter 2013.

Last year, revenue from mobile games generated 11.24 billion yuan (US$1.84 billion), accounting for 13.5 percent of China's overall video games industry. 

Himself a former Tencent executive, Liu said Alibaba would offer its mobile games platform free to developers in the first year, but gave no timeframe on when this would be made available. 

The company will face fierce competition from Tencent, which has continued to push its gameplay for the mobile games business. Just this week, as part of efforts to drive its mobile payment service, the company announced it was one of the investors in Didi Taxi's US$100 million fundraising campaign. The Chinese taxi reservation mobile app boasts 22 million users who generated over 350,000 bookings a day in December 2013, and partners 350,000 taxi drivers in 32 countries.

WeChat users have the option to pay for their Didi Taxi bookings with the integrated payment service in the instant messaging app

Not to be outdone, Alibaba earlier this week said its Alipay e-payment service was now available to users on the Sina Weibo, allowing them to make online payments directly via the microblogging service. Previously, these microbloggers would have to separately log into Alipay, or other e-payment and Internet banking services to complete the payment process. With the new integrated service, Sina Weibo users can now link their Alipay accounts and finalize their payments with a six-digit password.