Shulou(Shulou.com)11/24 Report--

Phoenix New Media Technology News Beijing time on October 3 news, people familiar with the matter said that Tencent Holdings is readjusting its merger and acquisition strategy, focusing more on acquiring majority stakes in overseas game companies. At present, Tencent is looking at global expansion.

Over the years, Tencent has invested in hundreds of promising enterprises, mainly in the domestic market. It usually takes minority stakes and continues to invest as a passive financial investor.

Targeting European gaming companies, however, people familiar with the matter say Tencent is now actively seeking to acquire majority or even controlling stakes in overseas targets, especially European gaming assets. This shows that Tencent is relying on the global market for future growth, which requires a strong best-selling game portfolio.

People familiar with the matter also revealed that in addition to the core gaming area, Tencent is also seeking to snap up global assets, especially those related to the so-called meta-universe in Europe.

Tencent responded that it had been investing overseas for a long time and that it was looking for "innovative companies with excellent management teams" and giving them room for independent development, but did not elaborate.

Tencent's search for a larger stake in existing game portfolios or new targets will give it a greater say in the businesses of these companies and help gain access to the intellectual property rights of popular games, according to people familiar with the matter. At the same time, other technology giants such as Microsoft, Sony and Amazon are snapping up game assets and related intellectual property rights.

James Mitchell, Tencent's chief strategy officer, said on a conference call after the August earnings release that the company would continue to actively acquire new overseas game studios. "as far as the gaming business is concerned, our strategy is to focus on developing our capabilities, especially in the international market. We will continue to actively acquire new game studios outside China." He said.

"We believe that Tencent will continue to invest reasonably to acquire high-quality game content and talent, and to deepen its partnership with the world's top studios," Citigroup analysts said in a report in early September. To increase its investment and sense of presence in overseas markets. "

In September, Tencent increased its stake in Ubisoft, making it the largest single shareholder in France's top game developer. Tencent currently owns 11 per cent of Ubisoft, which could be increased to 17 per cent in the future. This follows Tencent's acquisition in June of Copenhagen-based Sybo Games, the developer of Metro Parkour, a popular mobile game. Tencent also acquired a 16.25% stake in Japanese game company FromSoftware, the developer of Alden Ring, in August.

Last year, Tencent announced a $1.3 billion acquisition of British video game developer Sumo, one of Tencent's biggest overseas deals since the end of 2020. In Europe, apart from its $8.6 billion acquisition of a majority stake in clash of Tribal mobile game developer Supercell in 2016, Tencent has focused on minority acquisitions for years, including a 9 per cent stake in Frontier Developments, the UK gaming company.

Elsewhere, Tencent is also seeking to increase its investment in Southeast Asia and go deeper into the region, according to people familiar with the Southeast Asian market. Tencent believes that the region, which has a population of 650 million, is expected to replicate the success of China's Internet boom.

At present, Tencent has set up a Southeast Asian Regional Center in Singapore to carry out international game distribution business here. Since last year, the company has repeatedly stressed that its goal is to make non-Chinese game revenue account for half of its game revenue, which is now about 25%. To that end, Tencent launched a new brand called Level Infinite in Singapore in December last year.

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