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Tencent Stock – Tencent’s Strategic Investments in Riot Games, Epic Games, and More

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Tencent Stock - Tencent'S Strategic Investments In Riot Games, Epic Games, And More

Tencent Stock – Inside Tencent’s Gaming Portfolio: From League of Legends to Fortnite and Beyond

Tencent Stock – Tencent, the world’s largest gaming publisher, holds a dominant position not only in China but also globally, with an extensive portfolio of investments in foreign gaming companies. As a major player in the internet and entertainment sectors in China, Tencent’s influence extends far beyond its own gaming ventures, shaping the global gaming landscape. With over 600 investments in various industries, Tencent’s significant stake in the gaming market continues to grow, making it a key force in both traditional and mobile gaming sectors worldwide.

Riot Games: Tencent’s Full Control Over League of Legends

Tencent’s relationship with Riot Games, the developer behind the highly popular League of Legends, is one of its most notable acquisitions. In 2011, Tencent initially partnered with Riot Games to publish League of Legends in China. However, after paying $400 million for a 93% stake, Tencent became the majority shareholder. By 2015, Tencent acquired the remaining 7% of Riot Games, taking 100% ownership of the company. League of Legends, which generates billions in revenue annually, has been one of the most successful titles in the world of eSports, and Tencent’s full control has allowed it to steer the game’s direction as a global phenomenon.

Tencent’s control of Riot Games extends beyond publishing rights; the company has also faced controversy over its mobile gaming ventures. When Riot Games refused to develop a mobile version of League of Legends, Tencent launched Arena of Valor, a mobile clone that became immensely profitable in Asia. Though the two companies had their conflicts, Tencent’s investment in Riot Games has undoubtedly cemented its position as the king of eSports.

Epic Games: Tencent’s 40% Stake Fuels Fortnite’s Rise

In 2012, Tencent made a significant investment in Epic Games, the company behind Fortnite and the Unreal Engine. Tencent purchased a 40% stake for $330 million, which was a pivotal moment in the evolution of the gaming industry. This partnership helped Epic Games transition to the free-to-play model, drastically changing the landscape of PC gaming. The move led to the launch of Fortnite, which has since become one of the most popular and profitable games in history.

Tencent’s involvement helped Epic Games focus on live-service games, allowing the company to refine its business model and attract a vast community of indie developers through its Unreal Engine. By opening the engine to more developers, Tencent played a crucial role in intensifying the competition in the game development industry, particularly against Unity, its main rival in game engine technology.

Larian Studios: 30% Stake in Baldur’s Gate 3 Developer

Tencent Stock - Tencent'S Strategic Investments In Riot Games, Epic Games, And More

Tencent’s investment in Larian Studios, the Belgian developer behind Baldur’s Gate 3, is another important move in its global gaming portfolio. In this case, Tencent holds a 30% stake, making it the company’s largest external investor. However, Tencent’s stake is a “preference” share, meaning it doesn’t have voting rights on Larian’s strategic decisions. This investment allows Tencent to profit from Larian’s success without having a direct say in how the company is run, with Swen Vincke, the CEO, and his wife holding the majority of voting power.

Baldur’s Gate 3, which launched to critical acclaim in 2023, is considered one of the best RPGs of its generation, making Tencent’s investment in Larian Studios a highly lucrative one. Tencent’s involvement in the studio has brought additional resources, but Larian remains mostly independent in its creative direction.

FromSoftware: Tencent Owns 16% of the Creators of Dark Souls

Tencent Stock - Tencent'S Strategic Investments In Riot Games, Epic Games, And More

As of 2022, Tencent subsidiary Sixjoy holds 16% of FromSoftware, the creators of iconic titles like Dark Souls and Elden Ring. This stake, acquired as part of a broader investment strategy to expand FromSoftware’s presence in global markets, positions Tencent as an influential shareholder in one of the most successful game studios in the world. Sony also holds a significant portion of the company, which has led to speculation about the potential acquisition of FromSoftware by Sony.

Tencent’s investment in FromSoftware aligns with its growing focus on acquiring stakes in studios behind highly successful franchises, further consolidating its influence in the global gaming market. Although the full impact of this investment remains to be seen, Tencent’s deepening ties with FromSoftware highlight its commitment to strengthening its position in high-profile, triple-A game development.

Krafton: Tencent Holds a 13.9% Stake in PUBG Developer

Tencent’s 13.9% stake in Krafton, the South Korean developer behind PUBG (PlayerUnknown’s Battlegrounds), underscores the company’s prominent role in the battle royale genre. Tencent initially invested in Bluehole, Krafton’s subsidiary, in 2017, gradually increasing its stake to 13.9%. With the rights to publish PUBG in China, Tencent has a unique position in this highly competitive genre, essentially competing with itself in some markets. The game’s immense success, especially in Asia, has cemented Tencent’s role as a key player in the battle royale genre.

Ubisoft: Strategic Stake and Partnership

In 2018, Tencent helped Ubisoft fend off a hostile takeover from Vivendi, a French conglomerate. Tencent’s investment, which started at 5%, has grown to 11% by 2022, with the possibility of increasing to 17%. This deal solidified a strategic partnership between the two companies, with Tencent publishing Ubisoft titles in China. Despite this, Tencent’s role remains as a silent partner, with no ability to increase its voting rights or ownership stake in Ubisoft, making a hostile takeover impossible.

Other Notable Tencent Gaming Investments

  • Grinding Gear Games (80%): The Path of Exile developer has been majority-owned by Tencent since 2018, despite concerns over potential changes to the game’s economy and microtransactions. However, the studio has maintained its independence in managing the game.
  • Funcom (100%): Tencent fully acquired Funcom, the developer behind Conan Exiles and The Secret World, in 2020, removing the company from the Oslo stock exchange. This acquisition allows Tencent to leverage Funcom’s expertise in multiplayer online games.
  • Supercell (84.3%): In one of the biggest gaming industry deals, Tencent acquired Supercell, the Finnish developer of Clash of Clans and Brawl Stars, for $8.6 billion, solidifying its dominance in mobile gaming.
  • Platinum Games: Tencent invested an undisclosed amount in Platinum Games, the developer behind Nier: Automata and Bayonetta. The terms of the deal have not been publicly revealed, but Platinum has confirmed that Tencent does not affect its independence.
  • Sharkmob (100%): Tencent fully acquired Sharkmob, the studio behind Exoborne, in 2019, as part of its strategy to expand its presence in both online multiplayer and action games.

Tencent’s Expanding Footprint in Global Gaming

Tencent’s expansive portfolio of gaming investments, which spans the globe from North America to Europe and Asia, solidifies its place as the most influential company in the gaming sector. Its strategic investments and acquisitions continue to shape the future of gaming, making it a critical player in both traditional and mobile gaming industries. With 100% ownership in some of the world’s most successful gaming studios and stakes in others, Tencent’s growing dominance presents both opportunities and challenges for the global gaming community.

As Tencent’s global influence grows, its role in shaping the future of the gaming industry will be a subject of continued scrutiny. Whether in eSports, mobile gaming, or live-service games, Tencent’s investments are fueling the expansion of gaming worldwide, and it’s clear that the company’s impact on the industry will only continue to grow in the years ahead.

Tencent Stock - Tencent'S Strategic Investments In Riot Games, Epic Games, And More

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