China's Tencent deal with Epic Games could help expansion overseas

Tencent plans to acquire a minority stake in U.S.-based Epic Games

China's Tencent said on Tuesday it would acquire a minority stake in Epic Games, a U.S. developer of PC, console and mobile games, in a deal that could eventually help the Chinese company realize its ambitions to expand overseas.

Tencent is best known as the company behind China's largest instant messenger client QQ. But the Internet giant is also China's largest online game provider by revenue, with a 33.7 percent market share, according to Analysys International, a research firm in Beijing.

While Tencent's core user base is located in China, the company has ambitions to eventually expand its services abroad, said Mark Natkin, managing director of Beijing-based Marbridge Consulting. In the U.S., Tencent has its own gaming studio, located in Boston, which is working on its first unnamed title.

"The end game for Tencent is to push its products overseas," Natkin said. "By making an acquisition with a well regarded leading North American game developer, it is only improving its hand to achieve that particular ambition."

Last year, Tencent acquired a majority stake in Riot Games, the U.S. developer of the multiplayer strategy game League of Legends. The game is now hosted for Chinese users through Tencent's services, with League of Legends helping to boost the company's gaming revenues, according to Analysys.

Epic Games, which also develops game engine technology, has published hit titles including the Microsoft Xbox 360 franchise Gears of War, as well as the top-selling Infinity Blade series for Apple's iOS.

Tencent said in a statement the investment would be completed within a month. Following the acquisition, Epic Games in Cary, North Carolina, will continue to operate independently.

Both companies said in a statement they expect to learn from each other through the new investment, and Epic Games will continue to develop new titles for different platforms.

Tencent did not disclose the terms of the investment. But Natkin said Tencent could decide to take a higher stake in Epic Games if the two companies cooperate well together. "Then you might expect Tencent to move forward and increase the size of the stake, possibly taking a majority stake in the company," he added.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?