By aggressively purchasing stakes in, or even entire companies focused on, the video game industry, Tencent has grown to become the largest video game corporation in the world. Well, it looks like the senior leaders don’t think they were all that aggressive and will only now transition to more existing markets to gain.
Reuters claims that to counteract the slow growth in China caused by the country’s tight rules, the company is shifting its mergers and acquisitions strategy to focus on purchasing companies outside of China. Given the business’s track record over the past few years, reports of a partial or complete acquisition of another company by Tencent no longer come as a surprise. The company’s decision to adopt a more aggressive stance comes as a surprise.
It’s a worrisome prospect for the future if you believe that Tencent is actively buying off every studio at the moment. Over the years, Tencent Holding Ltd (0700. HK) has put money into hundreds of start-ups, mostly in the domestic market. According to the report, in most cases, it has only purchased minority holdings and has maintained a passive financial investment. However, according to the four people Reuters spoke with directly about the topic, it is now actively looking to possess majority or even controlling stakes in global targets, particularly in gaming businesses in Europe.
According to Reuters sources, the move was made because the largest gaming company in the world plans to expand into new international markets, a strategy that will require the company to have a stable of successful titles.
The story goes on to state that Tencent is not just interested in acquiring gaming-related enterprises in Europe but also in metaverse-related operations that show promise. A representative for Tencent told Reuters that the company has been investing in overseas companies even before the new laws were implemented by the Chinese government. It actively seeks businesses with creative ideas and strong management, then stands back as they flourish.
