Chinese tech giant NetEase (NTES) made its first big move into Europe this week with the acquisition of London-based Kabam, which makes free-to-play mobile games including the Star Wars: Uprising, Marvel Contest of Champions and Fast & Furious titles. The deal marks the latest effort by NetEase to broaden its portfolio outside of China after several years of growth at home that saw it become one of the world’s largest video game companies by revenue and market cap.
As the Chinese technology giant continues its aggressive foreign growth push, NetEase revealed on Wednesday that it has bought a French game developer.
The company with its headquarters in Hangzhou, China, acquired Quantic Dream, establishing its first wholly owned game studio in Europe.
NetEase and Tencent, a competitor
have increased their efforts abroad as the home Chinese gaming business slows down due to stricter regulations.
Tencent has made several investments and acquisitions in foreign gaming firms over the years. NetEase is now catching up.
NetEase has opened game studios in the U.S. and Japan only this year.
In the past, NetEase has mostly concentrated on PC and mobile gaming, two platforms that are hugely popular in China. More than half of its worldwide game earnings come from mobile gaming. The tech behemoth has, however, recently begun to diversify into console gaming.
According to a press statement, the 25-year-old firm Quantic Dream will concentrate “on producing and distributing its video games on all platforms, as well as supporting and publishing third-party created products.”
That demonstrates NetEase’s desire to expand across mobile, PC, and console platforms.
The purchase of Quantic Dream is consistent with NetEase’s acquisition strategy of well-known worldwide brands and personalities. A video game called Star Wars Eclipse is presently being created by Quantic Dream and is based on the space adventure films from Disney. Mobile games based on Harry Potter and The Lord of the Rings have previously been made available by NetEase.
Although there are hints of some softening, Chinese officials are still closely monitoring the gaming business as NetEase expands internationally. Authorities limited the amount of time that people under the age of 18 may play online games last year and halted the clearance of new releases. Regulators must give the go-ahead for games to be published and made commercially viable in China. In April, those approvals recommenced.
Hu Zhipeng, vice president at NetEase and one of the senior managers of the internet giant’s video games division, stated that he hopes to see 50% of the company’s gaming income originate from outside, up from the current 10%, in an interview with CNBC last year.
The global gaming market is becoming more competitive.
Sony, a pioneer in console gaming and the company behind the PlayStation, revealed on Tuesday that it is creating a separate mobile subsidiary, putting it in direct rivalry with companies like Tencent and NetEase in China.