Tencent Turning Overseas Amid Regulatory Storm

Acquisition of Japanese Developer Behind Nintendo Switch Game

At the world's largest game show E3 held in Los Angeles, California, USA, in June 2019, a participant is playing the game 'Ninjala' (Photo by AFP)

[Asia Economy Reporter Yujin Cho] Tencent, China's largest internet company, has acquired a 90% stake in Japanese game developer Wakeup Interactive for 5 billion yen (approximately 51.8 billion KRW), Bloomberg reported on the 11th (local time).

The acquisition of Wakeup by Tencent took place in September, and according to an anonymous source, Tencent has also acquired several other unlisted Japanese game developers this year.

Wakeup is the developer of the hit Nintendo Switch game "Ninjala," and this acquisition was made to secure development talent.

Bloomberg evaluated that it is a very unusual move for Tencent, China's largest game publisher, to acquire a game development company outright.

Facing strong regulations from Chinese authorities, Tencent is expanding its reach into overseas markets to overcome challenges such as regulations on minors' gaming and delays in game releases, which have visibly impacted its revenue.

In fact, Tencent's net profit for the third quarter of this year was 39.5 billion yuan (approximately 7.3 trillion KRW), marking only a 3% increase compared to the same period last year, recording the lowest growth rate in two years.

Revenue increased by 13% year-on-year to 142.4 billion yuan, but the revenue growth rate was very low compared to the target of 25%.

The report also stated that NetEase, another Chinese gaming giant facing difficulties due to government regulations, is focusing on securing intellectual property overseas by consecutively acquiring small video game developers, mainly in the Japanese market.

This content was produced with the assistance of AI translation services.