Tencent Bids Supercell, The Developers of Clash of Clans for $8.6 Billion
Hou Dai, a 22 year old man recently graduated from college in Shenyang has played Clash of Clans for almost six hours on daily basis. Hou played enough and paid to get his leading clan of 50 online players. He almost spent around $6,000 on the game in three years.
Mr. Hou’s spending habit on the online Clash of Clans game shows that how Tencent, a Chinese Internet Company, paid $8.6 billion to Superell, the Finnish game creator of Clash of Clans through SoftBank Group Corporation in Japan.
This deal will most likely help Tencent to increase their popularity on international level. They have already figured out how to make money by using mobile devices. Tencent has been successful for its shopping and money transfer functions in their chatting applications.
Tencent wants to take on online gaming experience to become even bigger. This deal will give Tencent a strong presence in online gaming. But can Tencent retain people who made Supercell’s games hit?
There are many players who used real money in Clash of Clans to build their in-game power. Such payments are known as micro-payments which gave-out huge revenues for Supercell that makes them a global power.
According to Finnish Government, Supercell earned a revenue of about $2.4 billion last year. In April, Supercell’s revenue was just under $4 million according to SuperData’s Research estimate.
Company with market value of $210 billion has already invested in Riot games which created huge reputed games like League of Legends, European game creator Miniclip and CJ games from South Korea.
Tencent has no longer analogue internet advertising in USA because of slow growth rate of internet advertising in China. Tencent is investing on games and applications to make money. With its messaging app “WeChat”, which has over 700 million active users, Tencent can manage to connect huge number of players on Supercell games.
Tencent is hoping to retain developers and engineers from Supercell. Talented game project developers worked hard to create such brilliant online games like Clash of Clans and Clash Royale. Engineers will leave the Finnish Gaming Company if they don’t get independence as they had under SoftBank.