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China’s Tencent has invested $90 million in US-based mobile gaming outfit Pocket Gems, according to a report from The Wall Street Journal. That latest capital injection comes on top of the $60 million it funneled to the company in 2015, in exchange for a roughly 20% stake.
The Wall Street Journal reports the new investment bumps Tencent’s stake in Pocket Gems up to 38%, while giving the company a new valuation of about $600 million.
Pocket Gems is still slated to operate independently of Tencent and its other major investor, Sequoia Capital. But it clearly hopes to take Tencent’s understanding of the market in China to make its two biggest games—Episode and War Dragons—more popular there.
eMarketer estimates that a little more than half (50.5%) of mobile phone users in China will be mobile gamers this year, and that the number of such gamers will total 492.2 million.
That’s an untapped market that Pocket Gems is keen on reaching, since neither Episode nor War Dragons are currently available in Chinese-language versions.
“Tencent are really expert at taking things that work in the West and making Chinese versions of them,” said Pocket Gems CEO Ben Liu in an interview with TechCrunch.
Although it’s perhaps best known as the owner of popular messaging service WeChat, Tencent also has significant gaming holdings. The company first created a strong footprint in PC-based games, but has also expanded its mobile gaming efforts in recent years.
In addition to its expanded stake in Pocket Gems, Tencent also owns part of Riot Games, creator of League of Legends, as well as Supercell, the Finland-based firm that created Clash of Clans, among other gaming companies.
According to data from Cheetah Lab, two of the top 4 mobile gaming apps in China as measured by reach were Tencent-owned enterprises.
One of those games, the multiplayer online battle arena (MOBA) game King of Glory (with a player vs. player mode that operates from the URL qq.pvp.com) had the second highest reach among Android users in the country in fall 2016. The other, QQ Huanie Dou Dizhou, had the fourth highest reach among this group.
Research firm Newzoo reported in March that Tencent pulled in $10.2 billion in gaming revenues in fiscal year 2016, more than any other public gaming company.
For several years, business leaders have been abuzz about digital transformation. But as much as the phrase gets thrown around, many executives and other employees may still lack an of understanding of what it means to digitally transform their company—and what that transformation will require.
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