China’s Internet giant Tencent eyes global game market

China’s Internet giant Tencent is expanding its influence in the global game industry by swallowing foreign game firms agressively.

This week, Tencent bought a 20 percent stake of the U.S. firm Pocket Gems, paying $60 million, according to the latest report by Wall Street Journal. Pocket Gems is a mobile game startup supported by the U.S. venture capital Sequoia Capital and rolled out its first game “War Dragons” last month. This is the second purchase of the U.S. game firms by the Chinese Internet giant this year. Last month, tt took a 14.6 percent stake of the U.S. game producer Glu Mobile for $126 million.

Market watchers say the Chinese firm’s latest move is part of its efforts to expand its influence in the global game market. For the last two years, it has invested in over 40 firms amounting to 4 trillion won.

South Korea's game industry is not an exception. Tencent already invested 72 billion won in 2012 in South Korea’s dominant mobile messenger Kakao, which has the largest mobile game platform, becoming the second largest shareholder of online giant Daum Kakao. It has reaped big returns from the investment and developed its own messenger WeChat, benchmarking Kakao Talk. It also has a 28 percent stake in South Korea’s conglomerate CJ’s game unit Netmarble Games, by investing around $500 million.

Tencent’s revenue from online games rose 41% to 11.96 billion yuan in the quarter, according to the firm.

“As Tencent is expanding its business into games and payment service unlike American rival Facebook, the Chinese firm is expected to see a faster growth than Facebook,” American investment bank Jefferies said.

By Chun Go-eun -