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Tencent Wants To Invest More Internationally

Tencent, the world’s biggest gaming company, is apparently looking to shift its merger and acquisition (M&A) strategy to put a greater emphasis on acquiring majority stakes in overseas gaming organizations. The hope is that this international expansion effort will offset the Chinese regulations that have slowed the business’ growth.

Prior to this, Tencent had invested in hundreds of up-and-coming businesses within the Chinese market as either a minority shareholder or a passive financial investor. Now though, sources that spoke to Reuters said the company is looking to “own majority or even controlling stakes in overseas targets, notably in gaming assets in Europe.”

“In terms of the game business, our strategy is… to focus on developing our capabilities, especially in the international market,” said Tencent’s chief strategy officer, James Mitchell, who echoed these expansion sentiments in an August post-earnings call. “We will continue to be very active in terms of acquiring new game studios outside China.”

Tencent also reportedly has an interest in the metaverse. One source told Reuters that the company is “looking to snap up global assets, in particular in Europe, related to the so-called metaverse.”

It shouldn’t come as a surprise that Tencent is looking to expand outside of China. After all, the company posted its first-ever quarterly year-on-year revenue decline during Q2 2022.

(All information was provided by CNBC and Reuters)

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