In Biggest Game Developer Acquisition Ever, Tencent Buys Clash of Clans Developer for $8.6 Billion

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And why not? The Chinese mega-corporation recently finished up picking up every last piece of Riot Games—the League of Legends developers—so after finalizing that acquisition, it only made sense they would then approach the developers of the largest mobile franchises in the world.

Supercell was founded back in 2010 in Helsinki, Finland. Since the fizzle of their first few games, they’ve released hit after hit. Considered to be the biggest mobile developer on the planet (in active users, not employee-size), Supercell has had major success with titles such as Hay Day, Clash of Clans, Boom Beach, and recent mega-sensation Clash Royale.

Boasting a staggering 100 million daily active users, the Finish developers made a reported
$2.3 billion dollars in 2015, nearly $1 billion of that being profit.

Today, Tencent Holdings Limited signed the dotted-line, acquiring the Finish Supercell for $8.6 Billion dollars. This marks the biggest videogame developer acquisition in history, beating out King’s sale of $5.9 Billion, Mojang’s sale of $2.5, and Oculus’ sale of $2 Billion.

I can’t help but notice, that these highly profitable game developers are going for a small price in comparison to the rest of the tech world.

With 49 times the employee count, and mere pennies more in revenue reported, 21st-century resume and job portal LinkedIn just sold to Microsoft for slightly more than $26 Billion dollars. But why? Even Skype, which was then (2011), and is still now, used infrequently by many, sold for $8.5 Billion. To add to the confusion, Skype was reported to have an average DAU of 4.9 million users. Is that astronomical difference of 95 Million DAU really only worth $100 Million dollars?

Last year, Activision Blizzard purchased Candy Crush maker King Digital Entertainment at a minuscule $5.9 Billion dollars. King’s major franchises peaked at 158 Million DAU in Q1 of 2015, and at 1400 employees—as of 2014—made $2.3 Billion in revenue.

Tencent, has now regained the reigns as the worlds biggest video game publisher, based on revenue. They even surpassing Oracle Corp, and Intel Corp in market capitalization, at around $207 Billion total. But they’ve just done their part in ensuring we’ll see more out of the Clash of Clan’s devs.

Having spoken with Supercell’s CEO Ilkka Paananen prior to these events, I can only assume that Tencent will continue it’s notorious hands-off approach. Paananen has spoken on the pride they hold at Supercell for being true to their founding vision.

“Despite the financial success, we have been able to keep the company relatively small. Today we are 180 people where most people know each other by name and where people work in small and independent teams, in a zero bureaucracy environment,” said Paananen in an article for VentureBeat in March.

This is great news for Supercell, better news for Tencent, and promising news for mobile gamers.

Sadly, on the other end of the spectrum, Vivendi has recently bumped it’s shares in Ubisoft to 20.1%, and it has the French game devs reeling, as it seems a hostile take-over is imminent. This, coming just a few weeks after a successful take-over of Gamesloft (owned by the same parent company as Ubisoft) by Vivendi. All of this could spell a drastic change in the developing games industry as Ubisoft and Gamesloft are major pillars in the sector.

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