In a video game market in full consolidation, the Chinese giants are placing their pawns: by taking stakes in emblematic studios, NetEase and Tencent are strengthening in Europe, while their domestic market remains subject to strong restrictions.
In quick succession, two operations have thus taken place in France, revealing this appetite: following the announcement at the end of August by NetEase of the takeover of the independent studio Quantic Dream, developer of the future adventure game “Star Wars Eclipse”, its compatriot Tencent formalized at the beginning of September its strengthening of the capital of the giant Ubisoft.
World number one in the sector, Tencent reigns in Asia – the most important market in this industry – and has gradually woven its web in Europe.
For example, he acquired the Finnish studio Supercell (“Clash of Clans”, “Clash Royale”, “Brawl Stars”) in 2016 for 8.6 billion dollars.
From a record amount at the time, this operation has been largely beaten since: at the beginning of 2022, Microsoft for example put 68.7 billion dollars on the table to seize Activision Blizzard (“Call of Duty” in particular ), illustrating the major maneuvers in progress.
“Tencent invests enormously, they have hundreds of participations in studios, underlines with AFP Cédric Lagarrigue, expert of the market and adviser for the investment bank Alantra. They’ve been doing this for a long time and accelerating in recent years.”
The latest spoils of war? The Danish studio Sybo Games acquired last June, producer of the successful mobile game “Subway Surfers”, or the takeover of the British Sumo in 2021 for nearly a billion pounds.
– Strong restrictions in China –
Why such bulimia outside the Chinese borders?
Video games are in the crosshairs of local authorities for their addictive side among young people, like the ban on those under 18 from playing more than three hours a week.
In July 2021, Beijing had also frozen for nine months any license allowing new releases, which weighed heavily on the profitability of the sector, in a context of recovery aimed at “tech”.
If China ended up granting one of these precious sesames to NetEase, it shunned its competitor Tencent, which recorded in early August the first decline in its quarterly turnover since 2004.
“It’s getting harder and harder to get a new game approved and time restrictions for young players make it harder to grow. As a result, big players like Tencent and NetEase rely more on international territories for their revenue,” Louise Shorthouse, senior analyst for British research firm Ampere Analysis, told AFP.
These investments are rather well received by European studios because the Chinese giants, Tencent in the lead, have the reputation of not interfering in creation and of leaving total autonomy to their partners, testifies a leader in the sector.
“Whether we are a minority investor or a majority shareholder, we exercise no creative, editorial, managerial or day-to-day control over the company, its employees or the development of a game, because we believe in a partnership model that allows companies to operate independently and retain their culture,” Tencent said in a statement sent to AFP.
Example of the possibilities offered by such a partnership: Ubisoft announced, following the rise of Tencent in its capital, the development of “Assassin’s Creed Codename Jade”, the first mobile version of its successful series, which will be set in… Imperial China .
“Ubisoft is enjoying great success in Europe and the United States, regions in which Tencent hopes to strengthen its presence, and Tencent itself is very experienced in the mobile games sector, a platform in which Ubisoft seeks to further develop”, underlines the analyst Louise Shorthouse.
