What Tencent’s investment past says about the future of PlatinumGames
PlatinumGames announced yesterday that Tencent made a capital investment in the Bayonetta developer. The two parties did not disclose the details of the agreement, but Platinum did make a statement about what it means.
“This partnership has no effect on the independence of our company,” writes PlatinumGames boss Kenichi Sato. “And we will continue operations under our current corporate structure.”
Sato went on to explain that the company is going to use this influx of cash to expand into self-publishing and to establish “a wider global perspective.” But is that even possible under Tencent Gaming, which is one of the most massive and ubiquitous companies throughout the business of game development?
Well, if you look back at Tencent’s previous investments, the obvious answer is yes.
Tencent’s money should help Platinum
China is the biggest market in the world for video game revenues, and Tencent is the largest fish in that massive pond. The megaconglomerate also has a number of other lucrative businesses, such as internet services and e-commerce.
Put simply, Tencent has a lot of money. And its strategy for dealing with that cash is similar to what you see from other Chinese megacorporations. It tends to buy minority stakes in companies and then stand back.
Tencent owns 5% of Paradox, 40% of Epic Games, 9% of Frontier Developments, and so on for around a dozen gaming studios. It even owns 5% of both Activision Blizzard and Ubisoft.
The idea behind this strategy is to essentially make a lot of bets without having to do a lot of micromanaging or overseeing its own startup projects. But even when it does fully acquire a studio, like League of Legends developer Riot Games, Tencent still keeps the management at arms length.
More investments means more content for China
Of course, Tencent’s financial investments aren’t completely free of influence. The company is one of the biggest publishers in China, and that means it is always looking to bring more content to its audiences.
But this is the kind of influence that Tencent’s investment partners should (and do) welcome. Of course, it’s only welcomed because China’s unfair and deliberately obtuse regulatory system is impenetrable to most foreign companies. So if a game developer wants to bring a game to China, they need a partner anyhow. And, often, that partner is Tencent.
Regardless, a deal with Tencent means that Platinum can more easily access the potentially massive Chinese audience. On top of that, Tencent will help localize to the tastes and expectations of that market. It will then help with promotion.
Ubisoft partnered with Tecent in 2018 to relaunch Tom Clancy’s Rainbow Six: Siege in China specifically to get those advantages. And if Ubisoft, one of the biggest companies in the world, needs that help, Platinum definitely does.