Tencent Tops Video-Game Deal-Making Leaderboard

Tencent Holdings Ltd. was the world’s biggest investor in video game companies in the 12 months ending March 31, an industry report said.

“Tencent led or participated in over $4 of every $10 invested in games companies worldwide” in the period, a report from Digi-Capital said Wednesday.

Tencent operates the world’s largest games business by revenue, thanks to its position in China, which according to data from consultancy Newzoo is the world’s top video-games market with estimated sales of $32.5 billion last year.

Tencent was involved in either the sell-side or buy-side of mergers and acquisitions that comprised over three-quarters of the total value of video game-sector deals made over the period, said Digi-Capital, a U.S.-based firm that advises on such deals and offers management consulting service.

Investment in the gaming industry over the same period hit a record high, with over $4.2 billion being poured into gaming companies, the consultancy said in a blog post.

Most of this money went into technology companies and online platform operators rather than game developers, a trend that has been developing over the last few years, the post added.

The blog post didn’t provide year-on-year comparison figures or say who the other top gaming deal-makers were over the period.

Early this month, Chinese online-game developer Shanda Games Ltd. invested 10 billion South Korean won ($9.3 million) into South Korean peer Kakao Games. Tencent holds a 3-billion-yuan ($478 million) stake in Shanda.

In March, Douyu and Huya — China’s two major video game livestreaming platforms — drew over $1 billion in financing from Tencent.

The Chinese titan the same month also spent 370 million euros ($457 million) for a 5% stake in French peer Ubisoft Entertainment SA, best known for its “Assassin’s Creed” series of games.

In June, Tencent also spent nearly $72 million for a 2% stake in Ourpalm Co. Ltd., a Chinese mobile-game developer listed in Shenzhen.

Contact reporter Jason Tan (jasontan@caixin.com)