Chinese internet giant Tencent has agreed to purchase 21 million or 14.6% percent of shares of U.S. mobile game developer Glu Mobile Inc., totaling US$126 million at US$6 apiece, according to a statement released by the Glu Mobile. As part of the deal, Tencent VP Steven Ma will join Glu’s board of directors.
NASDAQ-listed Glu Mobile is a developer and publisher of free-to-play games for smartphone and tablet devices. The company found major success with a series of hit branded IP games like Kim Kardashian Hollywood, Robocop: The Official Game, and Hercules: The Official Game. Recently the company also announced a five-year deal with pop icon Britney Spears for developing a mobile game.
The tie-up is expected to smooth Glu’s entry into China’s fast-growing gaming market. “Collaboration between our companies will enable Glu to tailor its games more powerfully by tapping Tencent’s strength in online, social and MMO capabilities.” said Ma.
Tencent is investing heavily overseas like other leading Chinese internet companies Alibaba and Baidu. One big difference is that a large part of Tencent’s overseas investment goes to game-related companies, mostly because online gaming has been a major contributor to its revenue.
Mobile gaming is an easier path for the internet giant to commercialize its huge user base it has amassed through homegrown social-networking services like WeChat, Mobile QQ and other mobile apps.
According to the latest report from research firm Newzoo, Tencent’s revenue from gaming business surged 37% YOY to US$7.2 billion in 2014, beating Sony and Microsoft to top the global game revenues list.
Through partnerships and minority stakes, Tencent has invested in a variety of game-related companies that covered almost all the links in gaming industry: basic technology (EPIC Games), game developing (Activision Blizard, Riot), publishing (Level Up, OutSpark), community and tools (ZAM, Raptr), and gaming-related services (Kamcord, RunWilder).