Sea Limited, the Singapore-headquartered operator of Garena, Southeast Asia’s largest gaming business, has acquired Phoenix Labs, a 100-person games development studio based in Canada. The terms of the deal were not disclosed.
The move is a rare instance of a Southeast Asian consumer internet company buying up an American entity. It deepens Garena’s expertise in developing original game titles.
Image credit: Phoenix Studios
The deal echoes how Sea’s investor, China’s Tencent, has bought major game development houses like Supercell (the maker of Clash of Clans and Clash Royale) and Riot Games (the creator of League of Legends).
Sea’s first self-developed game, Free Fire, has been a hit. It reached 320 million quarterly active users in Q3 2019. The mobile game was a major contributor to Garena’s significant revenue and profit growth.
Garena’s rise is part of a broader growth trend in the digital gaming industry, which is being fueled by mobile revenue.
Garena’s steady cash flow
Phoenix Labs was founded in 2014 by the senior members of the Riot Games team. Its investors include Razer co-founder and CEO Min-Liang Tan as well as Sea. The company’s first title is Dauntless, a cross-platform, cooperative, role-playing game. The game had 15 million players in October 2019.
The studio’s expertise in blockbuster titles, which are typically played on PCs and consoles, will fill a crucial talent and experience gap in Sea, which has so far focused on developing games for small mobile screens.
Following the deal, Phoenix Labs’ existing management will continue to run the company.
Update on 30 January: The article originally said that Phoenix Labs is from the US. It’s actually from Canada. We apologize for the error.
Editing by Jonathan Burgos
(And yes, we’re serious about ethics and transparency. More information here.)
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