The World's Biggest Game Company Just Keeps Getting Bigger

Illustration: Path of Exile

Early this week, the studio behind Path of Exile received a majority investment from a Chinese corporation called Tencent. If that's a name you don't know, it's worth learning, because Tencent is, without a question, the largest company in video games. Yet, many fans don't even know it exists.

Tencent has its hands in so many companies that it sometimes competes with itself. Last year, for example, a rivalry broke out between the battle royale game PlayerUnknown's Battlegrounds and the game that would ape its popular formula, Fortnite.

The developers of PUBG fired shots to the press, accusing Fortnite of "replicating the experience for which PUBG is known." Fortnite went on to become the biggest game in the world.

Outside observers may have seen this as a bitter rivalry, but to a certain Chinese publisher, it didn't matter who won.

See, Tencent owns 40% of Epic Games, the company behind Fortnite. Tencent also has a minority stake in Bluehole, the developer of PUBG, and is actively buying more. Tencent has the exclusive rights on both games in its home country, China.

Like a bookie taking a vig on both sides of a sports match, Tencent will make money no matter what happens.

And indeed, Tencent is making money - incomprehensible amounts of money. Last week, the publisher reported first-quarter profits of $US3.65 ($5) billion.

For comparison, the mega-publisher Activision Blizzard made $US500 ($661) million in the same period, while EA reported a profit of $US566 ($748) million. Thanks to its massive investments in internet services and its complete dominance over games in China, Tencent is making more than most other game publishers combined.

Of course, that hasn't stopped Tencent from snatching up portions of those same publishers. The mega-conglomerate has a stake in Activision and publishes both Activision's and EA's games in China.

The extent of Tencent's investments is hard to wrap one's head around. Ever play Clash of Clans? Its developer, Supercell, belongs to Tencent. And what about League of Legends? Riot Games and its ~2,500 staff are all Tencent employees.

Earlier this year, when Ubisoft finally fended off Vivendi's attempt at a hostile takeover, guess which unlikely saviour offered a major investment? I think by now you know the answer.

And now, thanks to this week's investment in Path of Exile developer Grinding Gear Games, Tencent just got a little bit bigger. In 20 years, it will own us all.


Comments

    That's good to hear. How do I cash in my soul?

      I have bad news and good news.

      Bad news is that we don't have a way for you to give us what little else you own now that we have all your money.

      Good news is that as we are a part of the glorious communist party its only a matter of time until you can get run over by a tank in a pointless show of defiance.

        Hey man just because they're a chinese company doesn't mean anything.
        Why do people always have to instantly assume its going to be ba.. is that a tank outside my house?

    I really hate the amalgamation of anything into bigger and bigger parent companies. Doesn't matter whether it's games or cars, or movies or whatever. Sooner or later everything is owned by just a couple massive companies and if a product doesn't suit their corporate goals it doesn't get released, or it gets mangled out of all recognition until it does.

    Gonna be looking a lot more towards indy stuff in the future I think.

      I think you'll be finding a lot of indie companies are "invested" too.

        I'm talking about genuine indies who are a tiny team that does everything itself and releases a product effectively without backing from a publisher. The games that don't have ads splashed everywhere and retail boxes. There are still lots of them.

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