Tencent has continued its massive expansion into the gaming world today, after acquiring a minority stake in French developer Dontnod, a maker of Life is weird, Vampyr, and Tell me why.
The Chinese conglomerate has been occupied since early 2021, recently buying a majority stake in Klei Entertainment, which makes the survival game independent Do not starve.
This expansion will be surprising to those who pay attention to Tencent and its relationship with the gaming industry. Already a strong plant in China, Tencent has spent the last few years moving to the North American and European markets. It is a logical move for a company that has almost claimed dominance on its home turf, surpassing not only its Chinese competition but also becoming one of the largest gaming companies in the world.
Tencent tried to make its own games to attract North American and European players with mixed results. He released a remake of his own IP, Honor of the Kings, one of the highest revenues and the most downloaded games globally, despite its Chinese exclusivity. That remake, called Arena of Value internationally, he was crazy. But in 2019, it has developed Call of Duty: Mobile, which saw the right success for an already established franchise.
Tencent, too partnership with Nintendo in 2019, which helped the introduction selling the Nintendo Switch in the big Chinese market and gave Tencent the ability to create his own Pokemon game, Pokemon unite, as well as a useful ally for Tencent. Game cultures in Japan and China are unique, but Nintendo still serves as a model for an Asian video game company that kills it abroad.
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But what Tencent lacks to create its own successful games compensates by investing in the creators of others. Tencent already owns Riot Games and has a 40% stake in Epic Games. He also has lower stakes in a number of other gaming companies, including Activision Blizzard, Ubisoft, Paradox Interactive and the adjacent Discord gaming platform. This is a significant starting point in gaming for any company, and Tencent doesn’t seem inclined to slow down anytime soon.
These money movements brought Tencent its share of criticism, the most public since then A Hearthstone the competitor was banned after expressing support for the Hong Kong protests. some pointed to Chinese Tencent stakeholders as the reason behind the punishment (Blizzard denied his relations in China were a factor and diminished the punishment following the adverse reaction). Banning the game and eliminating their earnings will never go well for a company. However, it is also worth noting that people have been reprimanded in competition for smaller reasons.
Today’s share of Dontnod is quite minor in Tencent’s expansion scheme, but it is proof that the company does not intend to slow down any time soon.