8 March 2017 - 15:09

Riot Games owner Tencent seeks $2 billion loan

Is China’s tech giant up to make a big investment move again?
Business Reporter
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Tencent Holding is in talks with banks to raise up to $2 billion in new debt funding, Reuters reports.

The last time the Chinese tech giant raised a debt funding in the billions, it was to back the acquisition of a majority share in Finnish mobile game developer Supercell—known for its top titles Clash of Clans and Clash Royale—a massive deal that was confirmed on June 21, 2016.

Tencent paid $6.6 billion back then to purchase 84 percent of Supercell’s shares. It was the largest acquisition deal in the games market to date, surpassing the acquisition of Candy Crush's parent company Kings Digital Media by Activision Blizzard in Nov. 2015, which was worth an impressive $5.9 billion.

One can safely assume that Tencent is up for a big investment anytime soon and there’s a good chance that it’s going to take place in the video game industry again. Tencent is, after all, the biggest gaming company in the world.

Tencent generated about 13 percent of the global games market revenue in 2016, according to an estimate by research firm Newzoo. In addition to its full control of Riot Games it acquired the remaining equity of the League of Legends developer in Dec. 2015—the Chinese holding company has invested in a plethora of games businesses.

Tencent’s gaming empire includes investments in Activision Blizzard, Epic Games, Glu Mobile, Robot Entertainment, Discord, Douyu TV, Longzhu, Garena, and many more gaming- and esports-related companies.

It’s unclear if and how the assumed investment could affect the video games industry and esports in particular. But because of its sheer dominance in the gaming sector, every step Tencent makes is certainly one worth keeping a close eye on.

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