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Is Tencent Buying A Company?

With Tencent claiming it was fundraising for “several billion,” there are a lot of questions about what Tencent’s next move is. 

Courtesy of Jing Daily

Even after its recent acquirement of Leyou Technologies, Tencent has revealed it is looking to fundraise “several billion” for a U.S or Korean gaming company. Will Hershey, who broke the news via Twitter, speculated that companies like Com2uS, NetMarble and Pearl Abyss were likely up for grabs. 

The exact number has been reported to be around $9 billion, which is significantly more than it spent to acquire Leyou ($1.5 Billion).

Don’t expect it to be a platforming company, for these reasons:

  1. Mobile games are way cheaper to make than AAA, which have smaller returns since so much time and money is pumped into making them. Mobile games are a huge part of Tencent’s gaming empire. They’re cheaper to make, and the in-game purchases bring in a hefty profit. 
  1. Tencent is a majority shareholder of Grinding Gears (Path of Exile) and Riot Games (Valorant, League of Legends), has an 84% stake in Supercell (Clash of Clans, Clash Royale), owns all of Sharkmob (which was started from ex-Ubisoft,) and even champions Miniclip.
Courtesy of Miniclip

Tencent has a hand in almost everything when it comes to gaming. That small list was just a few examples of the tens of companies they own that all have a huge influence on the gaming market. Do you really think they are going after companies like EA ($40+ Billion) or Blizzard ($70+ Billion) when they can just buy out the remaining 60% of the Epic Store?

If any big-name company is going to fit this bill, it’s going to be Bungie, which stands at around $22+ Billion, but even then, could you really see them pulling that move?

Conclusion

Tencent fundraising for literal billions after the Leyou acquisition is a sure sign it is going on a spending spree this year. My prediction- with a lack of a business degree aside- is that it doesn’t seem like the company is going for a full-on AAA company. Why would it? It already has stakes in many of the top companies and is profiting from big games without even having to do any work. 

It’ll most likely use the funds to buy out the rest of a company, or just go on an acquisition spree and buy up many smaller, mobile-based game companies, with Krafton and Zynga being other possible options. 

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