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Tencent to Invest in Japan’s FromSoftware as NetEase Acquires France’s Quantic Dream 2022-09-02
Tencent to Invest in Japan’s FromSoftware as NetEase Acquires France’s Quantic Dream
To further expand their reach beyond China, Tencent Holdings, the world's biggest video game company, plans to invest in FromSoftware, the Japanese creator of Elden Ring, while rival NetEase has acquired France’s Quantic Dream, which developed Detroit: Become Human and Heavy Rain.
Units of Tencent and Sony Group will take minority stakes in FromSoftware, parent company Kadokawa announced yesterday. NetEase has bought out Quantic Dream, in which it has had a minority stake since 2019, the pair said the same day, making it the Chinese company’s first fully-owned gaming studio in Europe.
Tencent has never let up on overseas acquisitions, a gaming industry veteran told Yicai Global, while NetEase began last year to fast-track investments abroad. Chinese government policies encourage content creators to venture overseas, the person added, noting that offshore acquisitions also meet the regulatory requirements for industrial development.
FromSoftware will issue new shares to Tencent unit Sixjoy Hong Kong and Sony unit Sony Interactive Entertainment, PlayStation’s producer, to raise JPY36.4 billion (USD260.9 million) for intellectual property development and global publishing network, Kadokawa said.
After the issuance, Sixjoy will be FromSoftware's second-largest shareholder with a 16.2 percent stake, followed by Sony Interactive Entertainment with 14.1 percent. Kadokawa will own the rest.
The investment will not change game design and development nor the company's philosophy and independence in areas such as player communication and platform selection, FromSoftware said. Its online game Elden Ring became a hit after release on Feb. 25, seeling 16.6 million copies worldwide by June.
NetEase did not reveal how much it will pay for Quantic Dream, but said the Paris-based studio will also continue to operate independently after the takeover.
Hangzhou-based NetEase lags Tencent for overseas expansion. Foreign markets contributed almost 31 percent to Tencent's gaming revenues in the fourth quarter of last year. In the first three months of 2022, it was just 10 percent for NetEase.
Tencent made 33 gaming investments in 2020 and poured money into more than 100 gaming companies last year, including buying Finnish gaming giant Supercell for USD8.6 billion.
NetEase has six overseas gaming studios. Except for France's Quantic Dream, the others are based in Japan, Canada, and the United States. The firm hired an Xbox Live founding member to lead Jar of Sparks, one of the three studios based in North America.
Source: Yicai
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