The word is finally out that Softbank, currently the majority shareholder of Supercell, is about to sell off its stake in the company to Tencent at a 9 billion dollar valuation (!!!!!) Unlike Softbank and many other venture capital companies that make strategic investments in gaming, Tencent is a huge conglomerate that has its hands in many tech-related businesses. Here are 5 things that you should know about this tech giant:
1) Tencent is HUGE
A listed company on the Hong Kong stock exchange, Tencent is valued at over $200 billion dollars, and employs over 30,000 staff across the world. The majority of its staff is based in Shenzhen, China, where the company is headquartered.
2) Tencent is big on eSports
Tencent owns Riot, the developers of League of Legends. They are also invested in other eSports games such as Call of Duty, and run a number of tournaments for Activision/Blizzard games such as Hearthstone and Heroes of the Storm.
3) Tencent is big on mobile
Arguably the biggest player in mobile gaming in China, Tencent games make up for over 20% of the top grossing iOS titles in China. They have also strategically invested in a number of mobile gaming companies such as Glu (known for the infamous Kim Kardashian game), Miniclip (known for Agar.io), and Pocket Gems. Supercell will by far be their biggest purchase, and it’ll be interesting to see whether Tencent can leverage off any synergy within its existing portfolio.
4) Tencent is more than just games
Despite being known for gaming, Tencent actually began as an instant messaging software very much like MSN back in the days. One of Tencent’s most successful products right now is WeChat, a mobile messaging app with over 300 million users worldwide. Tencent also has businesses and investments in payment platforms, delivery platforms, and transportation platforms, just to name a few.
5) Tencent is very hands off with its investment
For those who fear that a Tencent takeover will effect the quality of Supercell games, you can put your fears aside. Tencent’s focus is to acquire companies that are leaders in their respective space, and they respect the fact that these companies are leaders because they know what they are doing. Sources have indicated that as part of the deal, Tencent must agree that Supercell retains control of its management, and will have the final say on many decisions. From what we’ve seen with Riot and a number of other Tencent investments, it’s safe to say that Tencent will very unlikely force Supercell to do anything against their will (ie. integrate with certain platforms, revise their monetization, etc.) Rather, Supercell will be able to benefit from Tencent’s reach across its portfolio of products, and expand their growth to the next level. Otherwise, why else would Tencent buy a company at 9 billion dollar valuation??