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Meitu, the largest manufacturer of selfie applications in China strives to diversify beyond the beauty sector in China. On Wednesday, the company listed in Hong Kong announced in a document that it had agreed to pay aapproximately 2.7 billion Hong Kong dollars (340 million dollars) A 31% stake in the game publishing company Dreamscape Horizon.
Dreamscape Horizon, a subsidiary of the Hong Kong-based Leyou gaming group, specializes in making video games for PCs and consoles. It owns 97% of the Digital Extremes studios, based in Canada. This global connection risks accelerating Meitu's expansion abroad. In contrast, the incursion into the games will help the Xiamen-based company capture more male users. (Operating from Xiamen might also have been handy for Meitu to meet the coastal city's growing group of game developers.) Of the 110 million active users each month overseas, only 30 million are men.
"The collaboration with Leyou does not only concern mainland China, but also the global market," said a spokeswoman for Meitu in a statement. "Mainland China currently accounts for the majority of Meitu's revenues. The acquisition will broaden our scope of activity and diversify the geographic flow of our revenues. "
The move abroad seems to be a tactic while the national video game market is crowded with established players such as Tencent, NetEase. and hundreds of smaller suitors. The local environment has also become hostile to gaming companies, while Beijing is intensifying its research on violent and harmful titles for young players. The result was a several-month hiatus in gaming approvals that caused Tencent's stock price to fall and led to a major reshuffle of the giant. And before long, Tencent announced that it would strengthen its ties with Garena for the distribution of games in Southeast Asia. The break ended in December, but businesses are still feeling cold as China ponders a new break this week.
Meitu is especially famous for its suite of photo editing and beautification applications, but the material is its main source of revenue for years. For the first half of 2018, the company generated 72% of its revenue by selling optimized smartphones to take selfies, a category that has proven itself in a country where retouched photos have become Standard. But Meitu's hardware sector shrinks as smartphone sales slow in China and mainstream phones like Xiaomi and Huawei are now equipped with filters. However, Xiaomi engulfed it in November to attract more female users.
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