Tencent is facing another setback in its gaming unit after it axed the highly anticipated mobile game based on Square Enix’s Nier franchise after two years of development due to monetisation challenges.

The project was abandoned as Tencent grappled with the complexities of finding a viable monetisation model amidst expensive development costs and franchise rights.

Those familiar with the matter, not authorised to speak publicly, disclosed that Tencent struggled to strike a balance, leading to the project’s cancellation.

Last year, Square Enix reported that Nier: Automata, the latest instalment in the Nier franchise, had sold more than 7.5 million copies since its 2017 release for computers and consoles.

The cancellation of the mobile game exposes vulnerabilities in Tencent’s decade-long strategy of transitioning successful console and PC games into mobile platforms.

Despite the cancellation, no job losses have been reported, as employees involved in the Nier project are permitted to transfer to other Tencent units, insiders affirmed.

Mobile games adapted from well-known computer and console games, referred to as IP games, often involve substantial fees to IP owners.

While Tencent had previously successfully adapted well-known games for mobile devices, such as PlayerUnknown’s Battlegrounds, the company has struggled to replicate the global success of League of Legends: Wild Rift in 2020, owned by Tencent subsidiary Riot Games.

Rivals like miHoYo and NetEase have achieved tremendous success with hits based on their IP games, such as Genshin Impact and Eggy Party, intensifying the competition for Tencent.