Tencent Buys ‘Clash of Clans’ Game Developer For $8.6 Billion USD

Following a series of leaked rumors, Chinese tech giant Tencent officially announced the purchase of a majority stake in Supercell, the Finnish gaming company behind the hit game Clash of Clans. The deal will buy a 84.3% stake in the company for $8.6 billion USD from Japanese firm SoftBank Group Corp.

The deal values Supercell at $10.2 billion USD, almost double its valuation a year ago. When SoftBank bought a 51% stake in 2013, the Finnish company was valued at a mere $1.53 billion USD.

“We have agreed with Tencent that Supercell will continue to be operationally independent, exactly as it was under SoftBank’s ownership,” wrote Ilkka Paananen, CEO of Supercell, in a post on the company’s blog.

“Our headquarters will stay in Helsinki and we will pay our taxes in Finland. All of this is very important for us,” Paananen added.

Tencent’s partnership will offer Supercell access to Tencent’s gaming platforms, such as QQ Games, as well as access to some of Tencent’s other game-related purchases, most notably Riot Games. In turn, the tech giant will grow its mobile gaming business. Gaming is a core part of Tencent’s revenue, making up more than half of the company’s overall revenue in Q1 2016. Tencent’s gaming business model is based off of various value-added services, including the purchase of digital weapons, as well as VIP memberships.

In China’s heavily monopolized mobile gaming industry, Tencent is one of the top players, in addition to iDreamSky and NetEase. As of April 2016, the tech giant occupied almost half of the top 20 titles for Android mobile games in China, with games like King of Glory, Crossfire, and We MOBA. In addition to mobile games, the tech giant will continue to diversify its gaming portfolio through its pan-entertainment strategy, which it announced during last year’s ChinaJoy tradeshow.

Image credit: Supercell