Chinese multinational conglomerate holding company Tencent (OTCMKTS: TCTZF) has acquired a majority ownership in Finnish mobile game development company Supercell, most well known for its Clash of Clans and Clash Royale games.
Tencent with 51.2% stake in consortium
Tencent previously held a 50 percent stake in a Luxembourg consortium, which was formed specifically to acquire Supercell. In 2016, it purchased 81.4 percent of Supercell at a $10.2 billion valuation. After spending another $40 million to indirectly acquire 44,000 additional Consortium Shares as part of a convertible bond on the Hong Kong Stock Exchange, Tencent has now increased its stake in the consortium to 51.2 percent.
Helsinki-based company Supercell was founded in 2010 and has since released five freemium mobile games which include Hay Day, Clash of Clans, Boom Beach, Clash Royale, and Brawl Stars. In 2013, the first two games boasted 8.5 million daily players and generated $2.4 million every day, according to a report by Forbes. In 2015, the company was earning $5.5 million daily, at one point. Market analyst and researcher Sensor Tower also reported that Supercell made $1.4 billion in revenue in 2018.
Similarly, Tencent owns many of the industry’s top-earning mobile games with titles like Honour of Kings and PUBG Mobile. The holding company owns a 48% stake in Fortnite developer Epic Games, 29% stake in Funcom (FRA: F7IA), 5% stake in Activision Blizzard (NASDAQ: ATVI), and completely owns League of Legends creator Riot Games. Tencent also has stakes in game companies that include Ubisoft, Paradox Frontier, MiniClip, Sharkmob, Discord, Grinding Gear Games, and Bluehole.
Despite a nine month freeze on new game approvals by the Chinese government over concern with the gaming addiction of the country’s youth in 2018, Tencent still published 38 games. Last year, Tencent’s mobile games brought in RMB 77.8 billion ($11.1 billion USD) in revenue – an increase of 24% year over year (YOY).