HONG KONG, Dec 15 Reuters Chinese tech giant Tencent Holdings on Friday launched DreamStar, a new party game that has been widely anticipated by users and pegged by analysts to pose a threat to domestic arch rival NetEase .

DreamStar, in which gamers play as cartoon characters to race in an obstacle course, is seen as Tencent39;s move to take on NetEase39; massively popular game Egg Party, a surprise hit which has helped lift NetEase shares by more than 40 this year.

JPMorgan analysts said in a note on Thursday that the launch of DreamStar could impact NetEase revenue by 2 to 3. The bank also trimmed its forecast for NetEase revenue for the next two quarters by 4 and 5 respectively.

Egg Party is forecast to be on track to earn an annual revenue between 7 billion yuan and 8 billion yuan 980 million and 1.1 billion this year, according to a Goldman Sachs note.

As Tencent39;s answer to Egg Party, Goldman expects DreamStar to earn between 5 billion and 6 billion yuan in its first year.

NetEase39;s market capitalisation reached 67 billion on Friday, a day after surpassing food delivery giant Meituan to become China39;s fourthbiggest internet company.

Tencent remains China39;s biggest internet company. It is the world39;s biggest video games provider and it operates China39;s leading social network app WeChat.

Tencent has been in search for new hit gaming titles as competition from other game developers like NetEase and miHoYo, producer of Genshin Impact,…