In what could possibly turn-out to be a game-changing partnership for the online gaming industry, Qualcomm has announced a strategic partnership with Tencent on Monday. Under this, the two companies will be collaborating on mobile gaming projects that will be optimized for Qualcomm’s Snapdragon processor family.

“Tencent has worked closely with Qualcomm Technologies and we are very pleased that the strategic cooperation announced today has deepened and expanded the relationship between the two parties,” Steven Ma, Senior Vice President at Tencent, said in a statement.

Tencent is reportedly creating a 5G gaming phone by teaming up with Asus’ fan favorite gaming division, Republic of Gamers. Under the Qualcomm-Tencent collaboration, this device will be powered by Qualcomm’s processing chips.

Tencent Games is the world’s largest gaming company with a market cap of $453 billion in 2018 in the Chinese markets. Its parent company Tencent Holdings provides services such as social networks, music, web portals, e-commerce, mobile games, internet services, payment systems, and smartphones.

The gaming company is responsible for many popular gaming titles which include MMORPGs like PlayerUnknown’s Battlegrounds (PUBG) and League of Legends. The company also hosts Call of Duty Online and partly own stakes in the successful battle royale game Fortnite.

Amid the tensions going on between the US and China, this partnership will help Tencent expand beyond the Chinese gaming market (where it’s already quite successful). Tencent experienced a fall in revenue last year (a drop of 4% in Q3 2018) due to the increased scrutiny and suspension of video game licensing by the Chinese government which continued till the end of the year.

Qualcomm, on the other hand, will obtain feedback from Tencent concerning the latest Snapdragon chips which have been optimized for gaming. This will help Qualcomm improve the performance of its processors. The chipmaker recently introduced the Snapdragon 855 Plus, which is designed for heavy gaming.

The agreement includes joint efforts by the two companies to develop game content and performance optimizations, Snapdragon Elite Gaming enhancements, cloud gaming, and AR/VR gaming. Tencent is reportedly working on a cloud-based gaming platform similar to the ones being developed by Google and Microsoft, and the collaboration with Qualcomm is a huge step in the process.

“With 30 years of innovation under our belt, we’re ushering in a new age of gaming. Mobile gaming, an important 5G use case, will soon take advantage of the next generation of connectivity. Faster speeds, more bandwidth, and cutting edge ultra-low latency will support real-time, multi-player and immersive gaming experience,” said Frank Meng, Chairman of Qualcomm China, in a press release.