Tencent will acquire a 6.86% stake in Japanese media publisher Kadokawa for JPY 30 billion (USD 264 million). The move is part of the company’s plan to expand its overseas footprint and build upon its status as the world’s largest video game company.
Kadokawa announced on Friday that Sixjoy Hong Kong Limited, a Tencent subsidiary, will buy 4.86 million shares of the firm. The deal will take place between November 15 and 26. Tencent will become Kadokawa’s third largest shareholder. This marks Tencent’s largest investment in Japan so far.
Kadokawa is a Japanese media conglomerate that owns a variety of intellectual property, spanning books, movies, animation, and video games. The company also runs video streaming site Niconico, which inspired the creation of Bilibili in China.
The proceeds from Tencent will be used for investments in content creation, such as the recruitment of editors and producers. By partnering with Tencent, Kadokawa aims to fortify its global presence, particularly by releasing video games in overseas markets like China.
As China tightens regulatory scrutiny on the gaming sector, Tencent has turned its focus abroad through investments and acquisitions. As of May 10, 2021, the company had closed 51 deals related to video games, according to Niko Partners. Out of those deals, 21 were with foreign studios.
In the first half of the year, it invested in a video game company every three days. In contrast, it made ten such investments in all of 2019, and 31 in 2020. Most of Tencent’s portfolio companies that are based overseas are developers of PC and mobile games.
On October 10, Tencent bought a 22% stake in Polish game developer Bloober Team and became the startup’s largest shareholder.