Tencent continued its massive expansion in the gaming world today after acquiring a minority stake in French developer Dontnod, maker of Life is strange, Vampyr, and Tell me why.
The Chinese conglomerate has been busy since early 2021, recently buying a majority stake in Klei Entertainment, which makes the indie survival game Don’t starve.
This expansion won’t come as a surprise to those paying attention to Tencent and its relationship with the gaming industry. Already a powerhouse in China, Tencent has moved into North American and European markets in recent years. It’s a logical move for a company that has virtually claimed all domination in its home base, not only surpassing its Chinese competition, but growing into one of the largest gaming companies in the world.
Tencent has tried to create its own games to appeal to North American and European gamers, with mixed results. It has released a remake of its own IP, Honor of Kings, one of the most profitable and most downloaded games worldwide despite its Chinese exclusivity. That remake, called Arena of Valor international, was a dud. But in 2019 it developed Call of Duty: Mobile, which saw success fit with an already established franchise.
Tencent too together with Nintendo in 2019, which helped usher in the sale of Nintendo’s Switch to the huge Chinese market and gave Tencent the opportunity to create their own Pokemon game, Pokemon unite, as well as a useful ally for Tencent. Game cultures in Japan and China are unique, but Nintendo still serves as a model of an Asia-based video game company killing it abroad.
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But what Tencent lacks in making its own hit games it makes up for by investing in the creators of others. Tencent already owns Riot Games and has a 40 percent stake in Epic Games. It also has smaller bets in a number of other gaming companies, including Activision Blizzard, Ubisoft, Paradox Interactive and gaming-adjacent platform Discord. That’s a major foothold in gaming for any business, and Tencent doesn’t seem inclined to slow down anytime soon.
These money movements have earned Tencent a host of critics, most publicly since then a Hearthstone competitor has been banned after voicing support for the Hong Kong protests. Some pointed out the Chinese interested Tencent as the reason behind the punishment (Blizzard denied her relations in China were a factor and reduced punishment after backlash). Banning games and taking their winnings away will never go well for a company. Still, it’s also worth pointing out that people have been reprimanded during competitions for lesser reasons.
Dontnod’s current share is quite small in Tencent’s plan of sprawl, but it’s proof the company has no plans to slow down anytime soon.