Ever wonder why the majority of mainstream game advertisements are for mobile games? Arnold Schwarzenegger promoting Mobile Strike. Kate Upton and Game of War. An entire feature-length animated film based on Angry Birds. Mobile games are incredibly big business. Some of the highest grossing apps generate millions of dollars of revenue. The top earners, like Clash of Clans, rake in billions.
To jump on this money-making train, large Chinese internet corporation Tencent is purchasing an 84.3 percent stake in Supercell, creators of Clash of Clans, Clash Royale, and Boom Beach. The deal will cost $8.6 billion. That’s $8,600,000,000. Remember when everyone freaked out when Disney purchased Star Wars in 2012? That was for $4 billion. Mere peanuts compared to the mobile game market.
It’s actually a really solid deal for Tencent. Last year Supercell was valued at $5.25 billion. Now they’re estimated around $10.2, doubling their value in just a year. The deal will help solidify the Chinese company’s presence in the Western market. The inverse is also true, as Tencent’s firm grip in China will help promote Supercell’s games in the Chinese Android market, where Clash Royale just recently launched.
The deal is expected to take place in Q3 2016. Japanese mobile company Softbank will sell its entire 73.2 percent stake of the Finnish company to Tencent. Tencent had previously purchased significant shares in other major game companies, including Activision Blizzard and Epic Games. They have also completely purchased Riot Games, makers of the most successful MOBA on the market, League of Legends.
With Supercell’s acquisition Tencent will quickly become one of the largest public game companies in the world – certainly the largest by game revenue. Industry analysts at Newzoo predict that Tencent will represent 13% of the global games market – that’s over $10 billion. While many gamers see the mobile market as a bubble about to burst, most industry analysts are optimistic over the future of mobile gaming.