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Tencent just added another portfolio member to its expanding global gaming empire. Voodoo, the French company behind a slew of popular casual games, announced on Monday that Tencent has become a minority shareholder in its business valued at .4 billion.Tencent Holding (HKG: 0700) went one step forward with adding another portfolio member to its spreading world gaming kingdom. This time it was made for boosting its game regarding the mobile casual plays. French video game developer and publisher Voodoo whose brand stands behind a bunch of popular casual games revealed that Tencent has become a minority shareholder in its business worth approximately .4 billion.The company, however, did not reveal the exact funding amount. Still, Tencent has made offerings regarding the all worth, from
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Tencent just added another portfolio member to its expanding global gaming empire. Voodoo, the French company behind a slew of popular casual games, announced on Monday that Tencent has become a minority shareholder in its business valued at $1.4 billion.
Tencent Holding (HKG: 0700) went one step forward with adding another portfolio member to its spreading world gaming kingdom. This time it was made for boosting its game regarding the mobile casual plays. French video game developer and publisher Voodoo whose brand stands behind a bunch of popular casual games revealed that Tencent has become a minority shareholder in its business worth approximately $1.4 billion.
The company, however, did not reveal the exact funding amount. Still, Tencent has made offerings regarding the all worth, from big checks that bought it full control in studios like Riot Games to smaller pieces in return for minority stakes in the likes of Epic Games.
The French games company actually started to look for a possible stakeholder in a deal that could value the company at more than $1.6 billion. During that time, Goldman Sachs became Voodoo’s minority shareholder in 2018, and some sources familiar with the situation said that the funding amount at the times was hovering at around $200 million.
The seven-year-old startup was co-founded by its current CEO Alexandre Yazdi and Laurent Ritter. Nevermind the deal, Yazdi will still be the largest shareholder and together with the management will still keep the control of the group.
Niko Partners analyst Daniel Ahmad commented that this transaction will allow Voodoo to reach millions of Chinese players through WeChat Mini Games (Instant Games).
He said:
“If the transaction does take place, Voodoo’s titles will not require a lot of changes to comply with regulatory updates in China since games monetized via ads do not require a license in the country. For Tencent, in Ahmad’s words, the deal might be another step in its “silent global expansion through identifying gaming firms to invest in or acquire.”
What This Move from Tencent Means for Voodoo
Voodoo came out as one of the global biggest publishers of ‘hyper-casual games’, titles that are, according to the company, built fast, “serve a single purpose and don’t obsess over the ‘glitz and glam’ of design, as we wrote before.”
The company says that it has 3.7 billion downloads across its family of games like Helix Jump. Its reservoir of mini-games seems like an optimal match to Tencent’s WeChat messenger, which itself runs a platform for light and simple games.
For Voodoo, on the other hand, the deal with Tencent represents an easy exit to the more than a huge Asian gaming market.
Yazdi stated:
“We are thrilled to welcome Tencent, a company we admire for its leading game and consumer mobile apps. We look forward to developing new products together for the Asian market, and publishing games created by the many talented games studios in the region.”
Be it as it may, let’s not forget that the Chinese tech giant recently impressed its investors with a big second-quarter earnings beat. Its revenue went up by 29% annually to 114.9 billion yuan ($16.2 billion), which surpassed the analysts’ predictions by 2.2 billion yuan.
Its profit rocketed by 37% to 33.1 billion yuan ($4.7 billion), clearing expectations by 5.5 billion yuan. Its adjusted profit, which excludes its investments and other one-time transactions, rose 28% to 30.1 billion yuan ($4.3 billion).
Those impressive growth rates indicate Tencent’s businesses still seem to be really interesting to traders from all over the world. Also, if we take in the fact that recently the United States President Donald Trump had threatened to ban WeChat in the U.S., it still only impacts a small percentage of its users. That means it will not meaningfully hurt its business.
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