Tencent Future Acquisitions [2021]

Discussion in 'Console Industry' started by Shortbread, Jan 21, 2021.

  1. ChuckeRearmed

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    Why Tencent is so prone on acquiring stakes left and right? Why other companies don't do that and try to buy the company itself? What are the benefits?
     
  2. liams

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    it likely gives them some insight into the operations of the companies that they invest in, and its also likely that they get the right to counter-offer any potential acquisition offer made by another company.

    This ensures that no one else is going to acquire the company without them knowing about it, and if they want to, stopping it. The reason microsoft or sony, (or anyone else for that matter) is not doing this is because having 10% ownership of a ton of companies does nothing for them, it doesnt get any content on gamepass for microsoft, and it doesnt make them first party for playstation. Microsoft and sony's business model isnt entirely based on revenue, of course thats part of it, but increasing the user base is a bigger part (which of course leads to more revenue, but having a one time hit of revenue from a game that does well isnt as good as increasing the player base long term)
     
  3. ChuckeRearmed

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    I see. So basically Tencent is doing a long play there. I wonder if they own a lot of shares can they purchase the whole company if needed.
    Seems like a soild approach that other companies could use. Like if they purchase stock of Capcom, T2, EA etc. they can prevent any future acquisition of that company until they decide to do that themselves.
     
  4. BRiT

    BRiT (>• •)>⌐■-■ (⌐■-■)
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    Tencent is also appealing to companies who have no presence in the China, as they can assist them with navigating the requirements of what must be done to make inroads.
     
  5. ChuckeRearmed

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    MS is working with Netease there right?
     
  6. liams

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    yeah they are handling the china version of minecraft, I dont know if the partnership goes beyond minecraft though. I think sea of theives could do well internationally with a strong local partner in someone like netease, it will be interesting to see if they expand their partnership
     
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  7. ChuckeRearmed

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    I thought Sea of Thieves was available in China though...
     
  8. liams

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    not on xbox or the windows store, though apparently you can still buy it if you have an international copy of steam while in china
     
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  9. BRiT

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    Came across this article related to Tencent and Leyou.

    ---
    Why Tencent spent US$1.3 billion to buy video gaming firm Leyou, but left it to languish
    • Eight months after Tencent’s acquisition, Leyou is mired in cancelled projects and hobbled by an exodus of employees
    • Tencent is said to be particularly interested in one Leyou investee company, American developer Certain Affinity
    When Tencent Holdings beat the likes of Sony to buy Hong Kong-listed video games company Leyou Technologies last year, the acquisition was expected to further boost the internet giant’s vast gaming empire.

    Tencent, which runs the world’s largest video gaming business by revenue and Chinese super app WeChat, completed its US$1.3 billion takeover of Leyou in December, which included Canadian subsidiary Digital Extremes – developer of hit online action game Warframe – and a deal with Amazon.com to create a massively multiplayer online role-playing game based on the epic fantasy novel and blockbuster film series The Lord of the Rings (LOTR).

    Fast-forward to August and Amazon has cancelled its online game deal with Leyou because the US company could not come to terms with Tencent. What is more alarming is that Leyou has become a shadow of its former self, according to four people with knowledge of the matter who declined to be identified because the information is not public.

    Read full article @ https://www.scmp.com/tech/policy/ar...3-billion-buy-video-gaming-firm-leyou-left-it
     
  10. fehu

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    There's some recent rumor/speculation about Tencent buying Sega
     
  11. ChuckeRearmed

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    No, I don't think so. They are poaching the talent though and invest in studios. I don't think they will buy Sega.
     
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  12. BRiT

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  13. BRiT

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  14. cheapchips

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    Oof. That's a bit of a kick in the national pride.
     
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  15. orangpelupa

    orangpelupa Elite Bug Hunter
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    seems tencent want to be like the company on glasses frame market (expensive brand like rayband, and cheap unknown brands, almost all are owned by one company)
     
  16. Silent_Buddha

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    Normally what governments do doesn't really impact gaming, but in this case...

    China is increasing it's crackdown on game development. At the end of Aug. it put into law more stringent restrictions on how long game developers and publishers can allow minors to play games in China.

    They have ramped those up as they are imposing more restrictions. These are aimed at limiting or removing violent content in games, glorification of money in games, effeminate portrayals of men in games, etc. I don't imagine it'll be very long before any game that doesn't glorify the Chinese government is prohibited in China or by any games developed by Chinese owned companies. Likewise, I imagine it's only a matter of time before portrayal of gay content in games is prohibited as presaged by prohibition of effeminate men.

    Also, game companies and all companies in general in China should stop focusing on making large sums of money and should instead focus on the public good. I could make an argument here WRT how this is in preparations of China going to a wartime economy ... but ... anyway.

    Why is this worrisome? Think about all the gaming companies around the world which Tencent either own a majority stake, own outright or own a large controlling interest.

    Development houses outside of China may or may not be able to avoid some of the restrictions that China is placing on game development, but anything developed in China most certainly won't. Either Tencent gets those companies to follow China's regulations or bad things could happen to the people at Tencent. That's a lot of pressure on Tencent to exert more control over studios under their umbrella.

    Scary stuff, IMO. Especially since some of my favorite games and developers are under the Tencent umbrella: Warframe (Digital Extremes), Path of Exile (Grinding Gear Games), Epic Games (40% owned by Tencent who also own rights to nominate people to Epic's board of directors), and plenty of other Western developers.

    OTOH - if I try to look at the silver lining, maybe this will get Tencent to divest itself of Western developers. But the dark side is that they just close them down because selling them would potentially make them a profit potentially angering Ji Xinping, which you do NOT want to do if you are in China.

    Regards,
    SB
     
    #36 Silent_Buddha, Sep 15, 2021
    Last edited: Sep 15, 2021
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  17. eastmen

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    Well aside from Epic who make engines the rest can just leave those companies and create new studios and make similar games.
     
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