Tencent has done it again. The Chinese social and gaming giant has for years now been one of China’s biggest overseas investors, but its most recent purchase may take the cake: the company has splashed US$8.9 billion to acquire Supercell. Supercell, the Finnish mobile game developer behind the global hit Clash of Clans, is the second-biggest mobile game company on earth according to Pocket Gamer, and it did a whopping US$2.3 billion in sales last year.
It’s not hard to understand why Tencent, China’s largest video game developer and publisher, might be interested in buying a highly successful mobile game studio. But those who haven’t been following Tencent’s global investments closely over the past few years might not realize how big a piece of the global video game market Tencent now controls.
Mobile domination
Photo credit: Gamenomnom.
Let’s start with mobile. In China, there’s no question that Tencent is top dog. On iOS, for example, Tencent has the top free-to-play game and seven of the top 20 highest-grossing games, far more than any other company according to App Annie. But Tencent owns a big chunk of the global mobile gaming market, too.
There’s Supercell, of course: one of the world’s top mobile game devs now belongs to Tencent. But Tencent has also invested into other major mobile gaming firms, including Korea’s CJ Games (one of the country’s top developers), Iceland’s Plain Vanilla, US-based mobile game studio Dots, and Japan’s Aiming, among others.
Tencent also has invested in some mobile-gaming related companies like American startup Kamcord, which makes gameplay-recording software. Tencent’s own games may not have a major market outside of the Middle Kingdom, but the company is definitely heavily involved in the global mobile gaming market, and with the acquisition of Supercell, it’s arguably now the most powerful mobile game company on the planet.
PC/console domination
Photo credit: Pixabay.
Tencent isn’t all about mobile gaming, though. Its origins are in PC gaming, and once again, that’s a sector that Tencent itself completely dominates in China. China’s three most popular PC games – League of Legends, Dungeon and Fighter, and Crossfire – are all distributed and operated by Tencent in China. And that’s no short-term fluke; those three games have held a stranglehold on the top end of China’s gaming market for years. I’ve been watching China’s gaming charts somewhat regularly for more than three years now, and I’ve never once seen any other game break into the top three. The closest challenger I can recall was Blade and Soul, which is also distributed by Tencent in China.
Just as in mobile, outside of China Tencent has a much less visible but no less influential presence. First of all, Tencent outright owns American game studio Riot Games. Riot is the maker of League of Legends, which is the world’s most popular PC game and which generated US$1.6 billion in revenue last year – seven times more than its closest competitor.
Tencent is a giant, and it wants to eat the global video game market whole.
But Tencent also has big stakes in a couple of other major players on the global PC and console gaming scene. Most people know that it owns a 40 percent stake in Epic Games, the massive American studio behind hits like Gears of War and Unreal Tournament. But it also owns a nearly-25-percent stake in Activision Blizzard, makers of hits from Call of Duty to World of Warcraft and one of the largest game companies in the world (Tencent itself is one of the few game companies that ranks ahead of Activision Blizzard).
Total domination?
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
