Tencent Boosts Global Investments with European Games as Focus as Beijing Cracks down on Online Gaming

Reported on Wednesday that Tencent has increased its investment in overseas startups by more than seven times this year in an effort to accelerate its global expansion. The move is seen as a response to the tightening of Beijing’s recent regulatory scrutiny of the online gaming industry.

Tencent struck a record 16 deals in Europe, bringing its total number of international investments to 34 in the first half of the year, according to data from Refinitiv. In contrast, there were only four overseas transactions in the same period last year and three in 2019.

Most of Tencent’s deals in Europe were in the gaming sector. The UK unit of Tencent subsidiary Miniclip, a Switzerland-based games website, bought Dutch studio Gamebasics in January. Miniclip also acquired a majority stake in Romanian studio Green Horse Games in February for an undisclosed amount.

While expanding its international business in the first half of the year, Tencent also participated in multiple rounds of financing for many startups across Singapore, India, Japan, South Korea and Australia.

“Tencent’s international gaming revenue is growing faster than their domestic revenue and now contributes 25 per cent of online games revenue,” said Wium Malan, a Propitious Research analyst.

Many of Tencent’s European deals were made via subsidiaries. Analysts said this was potentially to avoid public scrutiny. Tencent often picks local entrepreneurs or executives to lead the overseas businesses it invests in. It already owns Finland-based Supercell, creator of the popular Clash of Clans.

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