When Tencent Holdings finalized its $8.6 billion acquisition of “Clash of Clans” developer Supercell from Japan's Softbank on Tuesday, it was just the latest strategic move from what is rapidly becoming one of the biggest power players in the global video game industry. In fact, most of your favorite games are connected in some way to the Chinese internet giant — whether you know it or not.
When people think of smartphone games, in addition to “Clash of Clans,” titles such as “Candy Crush,” or maybe “Kim Kardashian Hollywood,” come to mind. Supercell has also developed “Clash Royale,” “Boom Beach” and “Hay Day.” It turns out Tencent has invested in all of those companies, developing games that are being played every day.
Prior to its acquisition of Supercell, Tencent's largest acquisition was “League of Legends” developer Riot Games. Tencent completed a 100 percent acquisition of Riot in December 2015. With “League of Legends,” Tencent has a franchise that generates more than $1 billion in revenue at the heart of the burgeoning eSports industry.
Beyond dominating eSports and the mobile games market, Tencent also holds minority stakes in several game companies.
Prior to becoming the giant public gaming company that publishes everything from “World of Warcraft” to “Call of Duty” to “Skylanders,” Activision agreed to merge with Vivendi, which owned Blizzard Games at the time, to create Activision Blizzard in 2008. Vivendi would own a 52 percent stake in the new company.
Five years later, Activision Blizzard announced the purchase of more than 420 million shares from Vivendi for $5.3 billion to become an independent company. Tencent was part of the ASAC II LP investment group that was led by current Activision Blizzard CEO Bobby Kotick to complete the transaction. ASAC II LP owned a 27 percent stake in Activision Blizzard, with Tencent owning a 12 percent stake in the company.
Activision Blizzard's recent acquisition of “Candy Crush” developer King means Tencent also has a minor stake in another mobile franchise giant.
Tencent's reach extends further with a minority investment in Epic Games, developers of the “Unreal,” “Gears of Wars” and “Infinity Blade” franchises as well as the coming “Paragon.” The Chinese internet company owns minority stakes in Glu Mobile, developers of “Kim Kardashian: Hollywood” and “Britney Spears: American Dream,” Robot Entertainment (“Orcs Must Die”) and mobile developer Pocket Gems.
Whether it's mobile, PC or console, Tencent is involved in some capacity. Combined with Supercell, Tencent is projected to produce $13 billion in revenue for 2016, according to New Zoo.