Wednesday, January 26

Tencent buys game studio behind hit Nintendo Switch titles

Tencent Holdings has quietly acquired a Japanese creative studio with several hit Nintendo Switch games to its name as part of a wave of talent acquisition in the home of anime and manga, people familiar with the deal said.

The Shenzhen-based entertainment giant has acquired a 90% stake in Wake Up Interactive for more than 5 billion yen ($ 44 million), said the people, who asked not to be identified because the transaction is not yet public. Wake Up owns Tokyo-based Soleil, which helped develop the Nintendo Switch hits Ninjala and Travis Strikes Again: No More Heroes. Taking control of almost the entire company is unusual for Tencent in Japan, which has so far made smaller investments and its main goal is to secure international publishing rights for future games.

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The Wake Up purchase, which occurred in September, is one of several deals Tencent reached with private game makers in Japan this year. Soleil is known for its track record of helping produce high-quality action games for consoles, PCs, and smartphones, which was part of the motivation for Tencent’s approach to its parent company. Ninjala is owned by GungHo Online Entertainment Inc., which led the development, and Travis Strikes Again is a product of Grasshopper Manufacture Inc.

Representatives for Tencent and Wake Up did not immediately respond to requests for comment.

Tencent and compatriot NetEase Inc. have been actively recruiting new talent in Japan for the past two years, seeking to acquire valuable intellectual property in anime and video games, as well as lessen their dependence on the Chinese domestic market for revenue. This year has made that project even more urgent as the Beijing government tightened restrictions on playing time and slowed down approvals for the release of new games as part of a broader crackdown on its tech giants.

Kadokawa Corp. said last month that Tencent plans to pay around 30 billion yen to acquire a 6.86% stake in the famous publisher. Grasshopper Manufacture, run by creator Goichi Suda, is now part of NetEase.

In addition to a handful of publicly announced deals, the game’s two Chinese titans have also acquired or taken a stake in numerous smaller Japan-based game developers, betting on their potential to produce a blockbuster title and securing a favorable position. and then negotiate its global distribution. His focus has been on small studios and talented individuals who may be contemplating leaving a larger company to establish their own creative operation. In most cases, the offers are kept secret from the public.

“Tencent does not see any advantage in announcing a deal as it does not want to alert the competition and give them an idea of ​​its strategy,” said Tokyo-based gaming consultant Serkan Toto.

© 2021 Bloomberg

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