Tencent continued its massive expansion into the gaming world today after acquiring a minority stake in French developer Dontnod, maker of Life is weird, Vampire, and Tell me why.
The Chinese conglomerate has been busy since the beginning of 2021, recently buys a majority stake in Clay Entertainment, which makes the indie survival game Do not go hungry.
The expansion will not come as a surprise to those who pay attention to Tencent and its relationship with the gambling industry. Tencent was already a power station in China and has been moving to the North American and European markets for the past few years. This is a logical step for a company that dominates almost everything in its home field, and not only surpasses its Chinese competition, but also grows into one of the largest gaming companies in the world.
Tencent tried to make its own games to appeal to North American and European players, with mixed results. It has released a remake of its own IP, Honor of kings, one of the best returns and most downloaded games worldwide despite its Chinese exclusivity. That remake, called Stadium of Bravery international, was a dud. But in 2019 it developed Call of Duty: cell phone, which was successfully suited for an already established franchise.
Tencent too partnership with Nintendo in 2019, which helped to introduce selling Nintendo’s Switch to the massive Chinese market and gave Tencent the ability to make its own Pokémon game, Pokémon unite, as well as a useful ally for Tencent. Japan and China’s gaming cultures are unique, but Nintendo still serves as a model of an Asia-based video game business killing it abroad.
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But what Tencent lacks to make its own hit games compensates for this by investing in the makers of others. Tencent already owns Riot Games and has a 40 percent stake in Epic Games. It also has smaller interests in a number of other gaming companies, including Activision Blizzard, Ubisoft, Paradox Interactive and the platform-adjacent platform Discord. This is an important foothold in the game for any company, and it looks like Tencent will not slow down any time soon.
These money movements brought Tencent its share of the critics, especially in public a Herdsteen competitor is banned after expressing support for the Hong Kong protests. Some showed Chinese stakeholder Tencent as the reason behind the punishment (Blizzard deny his relations in China were a factor and reduced the punishment after the setback. The ban on playing and taking away their profits is never going to exceed well for a company. It is also worth pointing out that people are reprimanded in competition if less ridden.
Dontnod’s share today is quite small in Tencent’s scheme, but it’s proof that the company has no plans to slow down any time soon.