Tencent In Talks To Buy ‘Clash Of Clans’ Gaming Company SuperCell

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Chinese tech giant Tencent may soon add the company behind mobile gaming sensation Clash of Clans to their already massive portfolio.

The Wall Street Journal reported on Thursday that Tencent is in talks to purchase a majority stake in Supercell from SoftBank Group Corp, according to people familiar with the matter. The deal that would value the Finnish gaming company at $9 billion USD.

When SoftBank purchased a 51% stake in Supercell in 2013, the company was worth $1.53 billion USD. The sale would free up some significant capital for Softbank, which also recently divested around $10 billion worth of Alibaba shares which the Japanese firm acquired as an early investor in the e-commerce company.

Tencent is also in discussion with other investors, such as Hillhouse Capital Group, who may join the deal as co-investors, according to the same sources.

“We don’t comment on market rumors or speculation,” a spokesperson from Supercell told TechNode. SoftBank and Tencent did not respond to requests for comment.

Supercell’s Clash of Clans has enjoyed extraordinary success in the Chinese mobile gaming market, which is primarily dominated by local players. Other notable companies in China’s mobile gaming industries include Chinese internet company NetEase, as well as mobile game publisher iDreamSky, which sold $15 million USD worth of shares to Tencent in the process of their initial public offering last April.

The multi-billion dollar deal with SoftBank will be Tencent’s largest to date. Just last December, Tencent purchased a majority stake in U.S gaming company Riot Games, the maker of hit eSports game League of Legends. In 2013, the Chinese tech company purchased almost half the stock of gaming firm Epic Games, totaling $330 million USD.

Gaming is a core part of Tencent’s business, accounting for over half of the company’s overall revenue in Q1 of 2016. According to market research firm DataEye, mobile games made up 36.6% of China’s digital gaming industry in 2015, a number that is expected to increase as tech companies shift their attention from PC games to mobile.

Image credit: clashofclans.com

Update (6/17/2016 14:28): This post was updated to include a comment from Supercell.