China’s NetEase snags French online game studio Quantic Dream


NetEase, a Chinese language expertise firm and billion-dollar video-game writer, has acquired French video-game studio Quantic Dream. Phrases of the deal weren’t disclosed.

The deal signifies that NetEase now has its first studio in Europe, and comes only a few months after the Hangzhou-based firm launched its first hub in the U.S., positioned in Austin, Texas.

Based in 1997, NetEase has emerged as one of many world’s top 10 gaming companies by revenue, forward of Nintendo and Digital Arts, however behind its arch rival Tencent, which sits in pole place. Quantic Dream, in the meantime, launched out of France the identical yr as NetEase did in China, although it has chosen a extra modest path to progress, with some 200 employees right now, and has remained solely non-public with minimal outdoors funding.

Nonetheless, it’s value noting that NetEase — which trades on the Nasdaq with a present market cap of greater than $57 billion — made an undisclosed minority investment in Quantic Dream again in 2019. So right now’s announcement that it has gone all-in and acquired the corporate outright maybe shouldn’t come as a significant shock, significantly at a time when NetEase is seemingly on an abroad growth mission.

NetEase additionally invested $100 million in U.S. online game firm Bungie back in 2018, although Sony took Bungie off the menu when it swooped in to acquire the firm in a $3.6 billion deal that closed final month.

Consolidation

Elsewhere, there was a flurry of consolidation throughout the gaming realm of late. Simply this week, Sony announced it was shopping for Savage Sport Studios, whereas Take Two recently closed its $12.7 billion Zynga acquisition. And Microsoft’s proposed $69 billion offer for Activision Blizzard is currently facing regulatory scrutiny.

So NetEase’s push into Europe very a lot matches right into a broader pattern that has seen gaming firms of all sizes focused by bigger companies on the lookout for a much bigger piece of the $200 billion video game market.

Whereas Quantic Dream has solely made round 5 video games since its inception, final yr it introduced that it had been commissioned by Lucasfilm to develop a new game referred to as Star Wars Eclipse, one thing that will have spurred Netease to go all-in on Quantic Dream. On prime of that, rumors recently emerged that Quantic Dream has been struggling to rent for the sport, which is due out a while within the subsequent few years, so having a well-financed company father or mother might properly change Quantic Goals’ fortunes on that entrance. In a weblog publish right now, Quantic Dream wrote:

With the intention to proceed our growth and presence on the planet, but in addition to fund different studios and develop into a world writer, bigger investments are wanted for us to maintain constructing our expertise and infrastructure, to ship ever extra spectacular next-generation video games, to develop our crew and to develop a number of initiatives concurrently.

On account of the deal, NetEase stated that Quantic Dream will proceed to function as an impartial entity out of France.

Globalizing

NetEase’s current strikes to open its first U.S. studio displays the rising ambitions of Chinese language gaming companies to construct a bodily presence abroad, transitioning from an period of funding and licensing from their international friends.

Buoyed by cash made out of 20 years of untamed progress till the current industry clampdown, China’s gaming giants have been buying shares of or shopping for international studios for years.

Tencent famously constructed a large portfolio by scooping up stakes in a few of the world’s most distinguished gaming studios, together with Supercell, Riot, Activision Blizzard, Epic Video games and Roblox. Below the helm of Simon Zhu, NetEase’s president of world funding and partnerships, the corporate appears to be taking part in some aggressive catchup.

NetEase is not any stranger to working with international friends. The agency’s tie-up with Activision Blizzard dates back to 2008 when it grew to become the writer of StarCraft in China. It has subsequently revealed different Activision franchises like World of Warcraft on the planet’s largest gaming market and had plans to make a cellular model of the favored multiplayer on-line role-playing sport before a recent fallout.

With its buyout of Quantic Dream, it stays to be seen whether or not NetEase will lengthen its in-house presence to Europe because it did with the U.S., the place it now has an on-the-ground growth and publishing crew. Tencent has already expanded by opening a handful of abroad branches for its profitable studios TiMi and Lightspeed.



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