Gamasutra is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
May 23, 2019
arrowPress Releases

If you enjoy reading this site, you might also want to check out these UBM Tech sites:

Why Chinese industrial firms are snapping up game studios: 'You can buy profit'

Why Chinese industrial firms are snapping up game studios: 'You can buy profit'

May 19, 2017 | By Alex Wawro

"Obviously there is little industrial logic in combining a Western mobile games company with a Chinese industrial firm. But people see how much money can be made, so it’s not so strange."

- Newzoo cofounder Thijs Hagoort speaking to Bloomberg about why game studios are being bought by companies that have nothing to do with games.

In recent years we've seen a slew of oddball acquisitions in the game industry. 

Runescape dev Jagex was bought by a Chinese mining firmTalking Tom dev Outfit7 was recently acquired by a Chinese chemical company, and Brink developer Splash Damage was snapped up by a Chinese company that dealt mainly in poultry.

All of these deals share something in common: Chinese industrial firms with no clear ties to games are buying up Western game companies. Curious devs may appreciate a recent Bloomberg feature digging into why, exactly, this is happening.

"You can buy profit," investment banker Affan Butt told Bloomberg, suggesting that Chinese investors are much more concerned about seeing continual profits than investors in other markets.

Moreover, Butt (who was involved in the sale of Jagex to Leyou, the Chinese poultry megacorp) went on to claim that quirks in the Chinese financial markets make it worth a Chinese company's while to buy up outside firms, even at remarkably high prices (the Outfit7 acquisition was priced around $1 billion) because those companies are often seen to be worth more once they're incorporated into a Chinese firm. 

It's what he calls an "arbitrage opportunity", one that may not have a huge impact on the game company being acquired if it continues to perform well.

"They weren’t looking to drain the company. They weren’t looking to take it apart,” Jagex exec Phil Mansell told Bloomberg, adding that the company's new Chinese industrial overlords have mostly remained at a distance. "They were looking to build upon what we already had."

The full feature, which revolves around the origins of Outfit7 and its eventual (surprisingly convoluted) sale to a Chinese industrial outfit, is well worth reading over on Bloomberg's website.

Related Jobs

PixelPool — Portland, Oregon, United States

Backend Developer â¯(Unreal Engine 4, Blueprint, C++)
Sucker Punch Productions
Sucker Punch Productions — Bellevue, Washington, United States

Lighting Artist
Petroglyph Games
Petroglyph Games — Las Vegas, Nevada, United States

Senior Game Engineer (C++)
Deep Silver Volition
Deep Silver Volition — Champaign, Illinois, United States

Senior Animator

Loading Comments

loader image