Tencent expands global footprint by taking stake in Korean studio Shift Up, creator of hit game Goddess of Victory: Nikke
- The acquisition makes Tencent the second-largest shareholder in Shift Up
- Deal indicates that Tencent is on its way to exerting more influence over global video gaming, as it seeks to offset sluggish domestic growth
Tencent Holdings has acquired a 20 per cent stake in a South Korean video gaming studio, as the operator of the world’s largest video gaming business continues to acquire gaming assets in overseas markets, according to a local media report.
The acquisition makes Tencent the second-largest shareholder in Shift Up, the studio behind hit mobile game Goddess of Victory: Nikke, behind founder Kim Hyung Tae, according to a report by South Korean media Money Today Network.
The report said Tencent acquired the stake before the hit game was officially released in November, without specifying an exact date or the financial terms of the deal.
Tencent did not immediately respond to a request for comment on Monday.
Goddess of Victory: Nikke, a role-playing shooting game which was developed by Shift Up and published by Tencent’s video game publishing division Level Infinite, has become a global hit game after it was launched on November 4.
In the first month of release, it racked up over US$100 million in sales and took the fourth spot among all mobile games in terms of revenue earned from the Apple App Store and Google Play store, according to data from app analytics firm SensorTower. Most of the revenue came from players in Japan, South Korea and the US.
The deal indicates that Tencent is on its way to exerting more influence over global video gaming, taking ownership, holding shares or reaching partnership deals with developers of four of the five most lucrative global titles.
Honour of Kings and PUBG Mobile, which took up the first and third spots for global video game revenue in November, were developed by Tencent’s TiMi Studio group and LightSpeed Studios, respectively.
Tencent also partnered with UK-based King Digital Entertainment, developer of the fifth-largest game by revenue Candy Crush Saga, to launch the Chinese version of the popular mobile game in 2014.
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The investment also reflects broader efforts by Tencent to ramp up its overseas presence as it seeks new growth to offset a slowing economy and ongoing regulatory scrutiny at home.
The company has made at least a dozen investment deals with foreign studios in the past year. It is the single biggest shareholder in Ubisoft Entertainment, France’s largest game developer. It also bought a 16.25 per cent stake in Japan’s FromSoftware, developer of hit role-playing game Elden Ring in August.
Tencent posted a 2 per cent drop in third-quarter revenue, marking only the second quarterly decline since the company first listed in 2004.
Profit rose just 1 per cent to 39.9 billion yuan (US$5.72 billion), as the company continues to battle macroeconomic headwinds, including knock-on effects from the country’s Covid-19 control policies, which were only relaxed this month.
