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Leyou Technologies’ (Warframe, Splash Damage) trading has been halted - acquisition incoming [Up: In exclusive talks with Tencent]
- Thread starter Dust
- Start date
iDreamSky is not a proxy for Tencent. Tencent is simply an investor in iDreamSky, just like they're an investor in Epic Games and pretty much half of all the mobile gaming studios that exist lmao.
Noteable interesants were Sony and Tencent by a proxy (iDream).
I think Sony won as the other 2 bidders have been dragging their feet in getting the deal closed, which suggests financing issues.
Car parts company with game division (Zhejiang Shiji Huatong Group) buys former chicken supplier, the headline writes itself.
If it's Sony (and that's still a big if), you don't spend this sort of money just for exclusive content, similarly to Microsoft dropping 2 billion on Minecraft. This is about cementing your place in different markets where you feel there's going to be huge growth in the future. I would also bet this is more of a response to the likes of Netease/Tencent pushing into the AAA market in Asia and beyond than a counter to anything Microsoft are doing in the West.
Or maybe the emergence of Sony's interest intensified the whole process and prompted one of the other bidders to get their shit together... hard to tell.
Tencent in Talks to Acquire Hong Kong-Listed Gaming Firm Leyou
Tencent Holdings Ltd. is in advanced talks to take Chinese gaming firm Leyou Technologies Holdings Ltd. private, edging out other potential suitors including Sony Corp. in a battle for the Hong Kong-listed company.
www.bloomberg.com
Tencent has joined the party.
Potentially a joint bid by iDreamSky + Century Huatong + Tencent to counter Sony.
Tencent is in talks. There's no acquisition yet, but the announcement today will be about that.
Edit - beaten!
Edit - beaten!
Tencent in Talks to Acquire Hong Kong-Listed Gaming Firm Leyou
Tencent Holdings Ltd. is in advanced talks to take Chinese gaming firm Leyou Technologies Holdings Ltd. private, edging out other potential suitors including Sony Corp. in a battle for the Hong Kong-listed company.
Tencent has joined the party.
Potentially a joint bid by iDreamSky + Century Huatong + Tencent to counter Sony.
Knew it was Tencent.
Tencent swooping in and winning the Leyou bid. Next up Tencent is going to shock everyone by acquiring WB Games and increase their stronghold in the gaming industry even further.
Hmm this is truly the age of consolidation, isn't it?
I can see HUGE moves being made by all big parties within the next 2-3 years since this is quickly becoming a matter of who will pull the trigger first not if the trigger is pulled.
The "Netflix of Gaming" allure is very real.
I can see HUGE moves being made by all big parties within the next 2-3 years since this is quickly becoming a matter of who will pull the trigger first not if the trigger is pulled.
The "Netflix of Gaming" allure is very real.
Why not? I thought Sony has lots of cash. This is the impression I get from all these acquisition threads and so forth..
Tencent has more but these acquisitions are not necessarily based off of cash alone.
It really depends who wants more those studios. Right now, Sony has 31 bn dollars hands on cash, while Tencent has around 29 bn dollars.
Sony does have a lot of cash, but they're fairly judicious and principled in M&A and I don't see them getting into a bidding war unless it's a must have asset. Lol, they looked at 21 Century Fox assets before Disney and Comcast drove the price up astronomically.
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Sony will lock it all down so probably better it's Tencent. Although there was someone else sniffing around but I can't remember the name.
Interesting to see who wins out. Sony can do an all cash offer. I wonder if Tencent is offering the same?
Hahaha your kidding right? As much as I love Sony Tencent could buy them 5 times over
Tencent has a much larger market cap (5x specifically) but has the same amount of "cash-on-hand" as Sony.
Now, the only reason I questioned the financing strategy of Tencent bid, is because the Bloomberg article mentioned that they were considering different financing options.
In a scenario like this I imagine it's a question of who values Leyou more, what competing near-term investment opportunities at each company looks like etc. I think both companies have base financing positions far in excess of what Leyou is likely to sell for in the end, but their priorities and valuations on the investment might be different.
Anyway, based on what we've heard so far, I imagine Tencent must be the frontrunner. Trading wasn't halted, for example, around news of Sony's interest, so I presume talks are more advanced/solid with Tencent (?) iDreamSky (a Tencent investment) has had a longer running interest here also.
Sounds about right. We should know the final outcome in the next few hours.
Tencent's current studio portfolio:
- TiMi Studio [internal Chinese studio, Call of Duty Mobile] (100%)
- Lightspeed & Quantum Studio [internal Chinese studio] (100%)
- Aurora Studio [internal Chinese studio] (100%)
- Morefun Studio [internal Chinese studio] (100%)
Then they have a number of foreign studios they have major investments in or complete ownership of:
- Riot Games [League of Legends, Valorant] (100%)
- Funcom [Age of Conan/Conan Exiles] (100%)
- Sharkmob [nothing yet] (100%)
- Supercell [Clash of Clans / Clash Royale] (84%)
- Grinding Gear Games [Path of Exile] (80%)
- Epic Games [UE / Fortnite / EGS] (40%)
Noteworthy Minor positions they own:
- Activision Blizzard (5%)
- Paradox Interactive (5%)
- Ubisoft (5%)
- Bluehole [PUBG] (1.5%)
WeGames, their digital distribution service / storefront / launcher has more MAU than Steam does (~200 million). Gaming isn't even all they do, obviously. I usually think of them like the Chinese Google.
The games industry has become increasingly consolidated but that's not recent, it's been trending in that direction for the last 20 years. The list of independent game developers capable of operating at AAA scale has been shrinking very rapidly over the last 10, and in the last 3 years it has entered another phase of acceleration. THQ Nordic / Embracer group has been snapping up small investments at a rate that is kind of incredible (feels like they add 1-2 new studios every quarterly report), Paradox bought a few, Tencent has been sort of throwing money around all over the place, happy to have minority stakes or total ownership depending on the situation, Microsoft has been buying up a lot of developers, and now Sony has realized it needed to secure some before they were basically all gone. Warner Bros considering a sale is probably the most surprising thing - it was economically viable despite shitty management, it belonged to a huge parent company, but I guess they just want out.
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I think today's news might just be the announcement that they are also negotiating with Tencent.
Zhejiang Shiji Huatong Group just announced that they are withdrawing their offer / ending the MOU they had with Leyou (source in Chinese).
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Tencent, the company that works with the government for mass surveillance?
People really prefer that company over Sony because of exclusives?
People really prefer that company over Sony because of exclusives?
