Chinese language tech giants are grabbing gaming studios world wide


People play computer games in an internet café in Fuyang, China’s Anhui Province.

Lu Qijian | Visual China Group | Getty Images

LONDON – After the US and Japan dominated the gaming arena for decades, China’s influence is growing as its tech giants take over gaming studios around the world.

Some experts now believe that this could make video games look a little different in the years to come.

It is asked whether the Chinese owners of US and European studios will try to influence the games they make or actually use them to promote Chinese values. It remains to be seen, but according to some experts, subtle changes could occur in the years to come.

“Some of these values ​​may be different from what many expect,” Sino-British writer Lu-Hai Liang told CNBC. “For example, Chinese women gamers are a huge market (500 million) and there have been many games and game studios with a focus on women indulging in the sector.”

Thomas David, a semiconductor engineer in the US, told CNBC that he thought gamers could see more titles where the “good” is Chinese and the “bad” is from the West, for example.

China’s own gambling market is heavily regulated. It does not allow games that contain certain political views, gambling, gore, nudity and many other things to be published and sold in the home market. The film industry is just as strict: US films must be adapted before they can be released in China.

Chinese culture export

“This area – how China could use games to export its culture – is incredibly important and largely missed,” Abishur Prakash, co-founder of the Center for Innovating the Future, told CNBC.

“China has several opportunities to carry its ideals into the world through games and to build a new kind of global power,” said Prakash. “One way is to ban the discussion on certain issues like Taiwan or human rights,” he said.

China could also “create new centers within games that help demonstrate China’s power” or use games to build its financial and commercial power, he said. “In the next Chinese games, users may only be able to purchase items in digital yuan,” said Prakash. “Or Chinese platforms like TikTok could be embedded in the Chinese games.”

Others doubt that Chinese owners of Western game studios will try to change the games sold in the West.

“I would be very skeptical if something like this happened,” Louise Shorthouse, senior games analyst at Ampere Analysis, told CNBC.

Steven Bailey, senior analyst at Omida, told CNBC that “Chinese companies have been involved in various Western game companies and content for a long time and understand that such changes will not support successful game development for the West.”

He added: “Conversely, anyone who publishes a game in China has to adapt it for that market.”

Tencent’s extensive investments

Tencent and NetEase have acquired stakes in gambling companies outside of China for years with little resistance.

“Tencent keeps buying the number 1 game in every niche in North America and Europe,” wrote tech investor Rodolfo Rosini on Twitter in February. “This is important because games have a cultural influence. And the control of the present and the representation of reality is very powerful.”

“If Tencent bought a stake in all the leading newspapers and television companies, people would hug, there would be political hearings,” he added. “Instead, they play the long game and buy next-generation media properties without competition.”

Hollywood has been promoting American values ​​around the world for years and advocating the country’s military might. Now it might be China’s turn to try the same, but through video games. While Hollywood is often critical of the US and Washington DC’s actions, China’s tech giants couldn’t say a bad word against Beijing, which wields great control over all of its domestic businesses.

China has more players than any other country, making it an extremely lucrative market for those who can get in. One of the reasons US and European gambling companies accept investments from Chinese companies is because they are required by law to work with a Chinese company before their game can be released in the country.

Headquartered in the UK, Sumo became the youngest gaming company to sell to a Chinese tech giant on Monday and announced a $ 1.26 billion deal with Tencent, the world’s largest video game publisher.

Neither company immediately responded when CNBC asked how or if Tencent will affect the games sumo is working on.

However, according to Daniel Ahmad, senior analyst at Niko Partners, Tencent has traditionally taken a hands-off approach to its investments and acquisitions.

“The company could also be an invaluable partner for Tencent when trying to break into AAA leeway with its own projects,” said Ahmad.

“The deal would also help Sumo capitalize on Tencent’s expertise in game development and publishing in China,” he added.

“Chinese game studios want to grow overseas, and while organic growth is an option, the acquisition will allow these companies to build a presence much faster and with local talent,” said Ahmad.

Tencent also invested $ 150 million in Reddit in 2019, angering some Reddit users who feared the platform might experience more censorship. However, this does not appear to have happened in any significant way.