Tencent acquires Warframe developer Digital Extremes and several other studios
Tencent has acquired Leyou Technologies in a $1.5 billion deal, meaning the enormous Chinese corporation now owns even more of the games you know. The deal had been hinted at earlier this year, with Sony also reported to be interested, but was signed-off by Leyou shareholders on December 11 and finalised today.
Leyou was a chicken processing company until, in 2014, it began to diversify into videogames by acquiring a majority stake in Canadian developer Digital Extremes, developer of Warframe. Subsequently Leyou went all-in on this strategy, selling off the chicken business in 2016 and acquiring British developer Splash Damage, which most recent has been working on Gears multiplayer and Gears Tactics, and a 20 percent stake in developer Certain Affinity, which in recent times has worked on Call of Duty: Modern Warfare Remastered, and Halo Infinite. Finally, Leyou established Athlon games, which is currently working with Amazon on the Lord of the Rings MMO as publishing partner.
Leyou’s maybe not a household name, but that’s some idea of the scale of this acquisition. The full list of Tencent’s holdings in games grows ever more comprehensive: as well as outright ownership of developers like Riot Games and Funcom, it owns just under 50 percent of Epic Games, plus stakes in Activision Blizzard, Ubisoft, Paradox Interactive, and many more.
“We’ve always been dedicated to creating team-based games that spark friendships and build passionate communities, and we strive to work with partners who believe in that mission,” says the Splash Damage co-founder and CEO, the appropriately-named Richard Jolly, “In our many discussions with Tencent, it became clear that they not only believe in that mission but will do everything they can to enable and empower us to realise it. This is going to be a bold new phase for our studio, with an amazing line-up of ambitious games that deliver on what Splash Damage is all about. We couldn’t be more excited.”
Digital Extremes has always maintained that its deal with Leyou ensured the studio’s creative independence, which to be fair does seem to have been the case with Warframe. The studio’s blogpost addresses the question of whether Warframe will continue to be developed in this manner:
“Yes, we will continue to create great content for Warframe and we will remain creatively independent. Our focus will remain on listening to you, our community, upgrading Warframe based on your feedback, and developing the kind of great stories, gameplay, and incredible new space ninja action you’ve come to expect from us. Tencent is well known for respecting the creative decisions and integrity of its studios, and for giving them the autonomy and independence to experiment, innovate and thrive.”
Companies like Epic have in the past responded robustly to any suggestion that Tencent is an overbearing or censorious partner, though the Chinese conglomerate’s holdings are now so wide and deep that it’s attracting attention from the U.S. government. There remains suspicion among western audiences about Tencent’s enormous holdings in gaming: after all, in recent weeks we’ve seen that Western digital storefronts are too scared to sell a Taiwanese horror game for fear of offending China. But its continued growth and reach seem unstoppable.