Chinese megacorp Tencent is reportedly “resetting its mergers and acquisitions (M&A) strategy” by focussing on “buying majority stakes mainly in overseas gaming companies”.
According to Reuters, Tencent traditionally acquired minority stakes and was content with being a “passive financial investor”, but it is now “aggressively seeking to own majority or even controlling stakes in overseas targets”, chiefly in the “core gaming sector”. Metaverse assets are also reportedly of interest to Tencent.
Citing “four people with direct knowledge of the matter”, Reuters adds that the shift in Tencent’s M&A strategy “comes as the world’s number one gaming firm by revenue is counting on global markets for its future growth, which requires a strong portfolio of chart-topping games” and follows regulatory issues in its home country.
In response, Tencent said it had shifted its M&S priorities “long before any new regulations” in China and looks for “innovative companies with talented management teams” (thanks, VGC).
ICYMI, Tencent is heavily investing in Ubisoft with a €300m investment in Guillemot Bros, the company run by Ubisoft’s co-founders. Tencent now has a 49.9 percent stake in Guillemot Bros., which has the largest stake in Ubisoft. In turn, Tencent will bring some of Ubisoft’s biggest franchises to mobile.
It’s just one of the dozens of investments by the Chinese tech giant, which also has stakes in Epic Games, Activision Blizzard, FromSoftware, and PUBG publisher, Krafton. It also owns 100 per cent of Riot Games, Sumo Digital, and Warframe developer Digital Extremes.
Shawn Layden, best known for his time in senior positions within Sony, joined Tencent Games last month as a strategic advisor.