Reuters: Tencent wants to make more major acquisitions in the game sector in the future

Tencent is reviewing its M&A strategy to focus more on buying majority stakes in game companies. Sources report this to Reuters. The Chinese gaming giant is said to be mainly interested in acquiring foreign companies.

Tencent is according to four anonymous Reuters sources plans to make more aggressive acquisitions in the coming years, seeking to acquire majority stakes and shares with voting rights. According to Reuters, the company mainly wants to do this in ‘overseas’ companies, outside of China. Tencent has been investing in companies for years, but previously mainly bought minority interests in companies, remaining as a passive investor.

The change in Tencent’s strategy follows, among other things, decisions by the Chinese government, which, among other things, wants to limit how long children can play games each week. Regulation in China is putting pressure on Tencent’s sales in the Chinese market. The company has therefore long relied on assets in the global market for its future growth, the sources report. Tencent would also be interested in companies working on the metaverse.

Tencent tells Reuters that it has been investing in companies outside of China for some time. It also did before the government came up with new regulations for the game sector. The company says it is looking for ‘innovative companies with talented management teams’ and ‘giving them the space to grow independently’. The company recently told shareholders that it would remain active in acquiring new foreign game studios. Tencent already has interests in several game companies. It recently increased its stake in Ubisoft and bought a minority stake in Dark Souls developer FromSoftware in late August.

Tencent’s strategy follows a period in which gaming giants such as Microsoft and Sony are engaged in major acquisitions. Microsoft in particular has been active in that area lately. The company recently acquired Bethesda and its studios. Microsoft’s proposed acquisition of Activision, the game’s largest to date, is currently under investigation by market regulators.