Today, the world’s biggest company by game revenues, Tencent, has acquired an 84% share in the highest earning mobile games company, Supercell. Combined revenues from both companies in 2015 totaled $11.1 billion, which is 12% of all game revenues generated globally.
For those curious, as a comparison, Activision, Blizzard, and King made a combined $6.7 billion in 2015.
Aside from League of Legends, Tencent has struggled to grow its revenues outside of China, especially on mobile, but this acquisition is expected to easily double the $1.3 billion it made outside of Asia last year, and possibly even triple this revenue.
Newzoo CEO Peter Warman stated, “This is certainly a good deal for Tencent. It solves a huge strategic problem and provides immediate additional revenue potential. This year, Supercell is on track to make over $2 billion outside of Asia. This is significantly more than the $1.3 billion Tencent made outside of Asia last year, the majority of which came from League of Legends. Tencent will now finally make serious mobile revenues outside of its home turf.”
“The immediate opportunity comes from the Android ecosystem in China,” he continued, “representing around two-thirds of the Chinese mobile market. Clash Royale is one of the best performing games on iOS in China and has just recently launched on Android in the third-biggest store in China: 360 Mobile Assistant. Tencent’s MyApp store is the biggest. Though it is not written in stone yet that Kunlun will no longer publish Supercell games, it seems obvious that Tencent will take over. Using Tencent’s store and QQ community represents an immediate $1 billion+ opportunity for Supercell’s portfolio in China, particularly Clash Royale.”
Check out the graphs below:
What are your thoughts on the acquisition?