Chinese Game Giant XD Inc. Bets Big on Studio Yet to Make Any Money
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Chinese video game company XD Inc. has agreed to a deal valuing a fledgling game studio at roughly $264 million — even though the studio has yet to generate any revenue. It is a bold bet aimed at finding the next global blockbuster as the industry confronts mounting growth challenges and investor reluctance.
Hong Kong-traded XD announced in a filing that it would pay $14 million to acquire about 5.3% stake in the gaming studio MiAO. Founded in July 2022 by Wu Meng, the former chief executive of leading game publisher Giant Network Group Co. Ltd., MiAO remains in early development, posting no revenue and accumulating nearly $8.3 million in losses over 2023 and 2024.
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- XD Inc. acquired a 5.3% stake in game studio MiAO for $14 million, valuing MiAO at about $264 million despite it having no revenue and $8.3 million in losses.
- Global gaming investments have declined sharply, with only $200 million in 35 deals in H1 2025 versus $2.2 billion in 137 deals in 2021.
- Chinese studios increasingly target global markets amid domestic challenges, focusing investments on small, creative teams for greater risk control and potential returns.
- XD Inc.
- XD Inc. is a Chinese video game company that recently made a bold bet by investing $14 million for a 5.3% stake in MiAO, a fledgling game studio founded by former Giant Network Group CEO Wu Meng. This deal values MiAO at approximately $264 million, despite the studio having generated no revenue and accumulating significant losses. This move reflects XD Inc.'s strategy to find the next global blockbuster amidst a cautious gaming market and increasing competition.
- MiAO
- MiAO is a game studio founded in July 2022 by Wu Meng, the former CEO of Giant Network Group Co. Ltd. Despite having no revenue and accumulating nearly $8.3 million in losses, Chinese video game company XD Inc. acquired a 5.3% stake in MiAO for $14 million. This investment values MiAO at approximately $264 million and is seen as a bold bet on finding the next global blockbuster in the challenging gaming industry.
- Giant Network Group Co. Ltd
- Giant Network Group Co. Ltd. is a leading game publisher. Its former chief executive, Wu Meng, founded the gaming studio MiAO in July 2022. MiAO is currently in early development and has yet to generate revenue, accumulating nearly $8.3 million in losses over 2023 and 2024.
- Skystone Games
- Wang Weizheng, the chief executive of Skystone Games, believes investors are prioritizing talent. He suggests that funding smaller, creative teams offers more controlled risk and potentially higher returns compared to investing in individuals from large, established companies.
- 2021：
- The global mobile-game industry peaked at 137 deals worth a total of $2.2 billion.
- July 2022：
- MiAO studio was founded by Wu Meng, former chief executive of Giant Network Group Co. Ltd.
- 2023-2024：
- MiAO accumulated nearly $8.3 million in losses over these years.
- 2024：
- A report by market research firm Newzoo found that 57% of players’ total gaming time was spent on titles released more than six years earlier, while new games accounted for only 12%.
- First half of 2025：
- Only 35 transactions amounting to $200 million were recorded in the global mobile-game industry.
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