Tencent buys Stake In Life from the makers of Strange

Tencent today continued its massive expansion into the gaming world after taking a minority stake in French developer Dontnod, maker of Life is strange, Vampyr, and Tell me why.

The Chinese conglomerate has been occupied since early 2021, recently purchase of a majority stake in Klei Entertainment, which makes the independent survival game Don’t starve.

This expansion will come as no surprise to those who pay attention to Tencent and its relationship with the gaming industry. Already a powerhouse in China, Tencent has spent the last few years establishing itself in the North American and European markets. It’s a logical move for a company that has almost claimed dominance in its own territory, not only surpassing its Chinese competition, but also becoming one of the largest gaming companies in the world.

Tencent has tried to create its own games to appeal to North American and European players, with mixed results. He released a remake of his own IP address, Honor of kings, one of the most profitable and the most downloaded games in the world despite its Chinese exclusivity. This remake, called Arena of Valor internationally, was a failure. But in 2019 it has grown Call of Duty: Mobile, which has seen the worthy success of an already established franchise.

Tencent too in partnership with Nintendo in 2019, which made it possible to inaugurate the sale of the Nintendo Switch in the huge Chinese market and gave Tencent the ability to create its own Pokémon game, Pokémon Unite, as well as a useful ally for Tencent. The gaming cultures of Japan and China are unique, but Nintendo still serves as a role model for an Asian-based video game company killing it overseas.

But what Tencent lacks to create its own successful games it makes up for by investing in the creators of others. Tencent already owns Riot Games and owns 40% stake in Epic Games. This also has small stakes in a number of other game companies, including Activision Blizzard, Ubisoft, Paradox Interactive, and the adjacent gaming platform Discord. It’s an important anchor in the game for any business, and Tencent doesn’t seem inclined to slow down anytime soon.

These money moves have brought Tencent its share of criticism, most publicly after a Fireplace the competitor has been banned after expressing support for the Hong Kong protests. Some Chinese actor Tencent pointed out as the reason for punishment (Blizzard refuse his connections in China were a factor and reduced the punishment for the negative reactions). Banning gambling and withdrawing their winnings is never going to go well for a business. However, it should also be noted that people have been reprimanded in competition for lesser reasons.

Dontnod’s current share is fairly minor in Tencent’s sprawl scheme, but it’s proof that the company has no plans to slow down anytime soon.