Chinese Internet company owns 40 percent of Epic Games

New financial documents reveal Tencent paid $330 million for minority stake in Gears of War studio.

Epic Games announced last summer that Chinese Internet company Tencent had acquired a minority stake in the Gears of War studio, but did not specify terms. Now, more information has come to light. Epic Games founder Tim Sweeney today confirmed with Polygon that the Chinese company owns 40 percent of the developer and has appointed two representatives to the Epic board of directors.

"In June 2012, Tencent made a minority investment in Epic Games, purchasing approximately 48.4 percent of outstanding shares of Epic stock, equating to 40 percent of total Epic capital inclusive of both stock and employee stock options," Sweeney said.

"As part of the investment, two Tencent representatives joined Epic's board of directors, in addition to the three directors and two observers appointed by Epic," he added. "We're thrilled to have a world-leading partner in Tencent, who gives Epic unique access to the Chinese market as we head into the next chapter of our 21-year history as a leading independent developer."

Recently published Tencent financial documents reveal that the Chinese company paid $330 million for its stake in Epic. Tencent said it decided to invest in Epic because the company is "driving change in the Internet industry" and its ambitions aligned with Tencent's own long-term strategic goal of creating "first-class products."

In the months after the deal was announced last summer, a number of high-profile Epic Games developers and executives left the company. First to leave was former producer Rod Fergusson, who left shortly after the deal was revealed and is now executive vice president of development at BioShock Infinite studio Irrational Games.

In August, three longtime developers at the Epic-owned Bulletstorm studio People Can Fly decided to leave, before design director Cliff Bleszinski left after twenty years with the company in October.

Former president Mike Capps announced he was retiring from Epic but staying on in an advisory role in December, before severing all ties with studio earlier this month.

In addition to Epic, Tencent currently owns a majority stake in League of Legends developer Riot Games.

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Discussion

254 comments
obsequies
obsequies

so the industries most used engine is now almost half sold to the chinese? how is this good? do they have any control over anything now?

selbie
selbie

China. Don't. Care

parrot_of_adun
parrot_of_adun

"Independent developer" means a whole lot less when you're publicly traded, Sweeney.

Angelsoft717
Angelsoft717

It just seems weird they would buy something so random. Asian markets don't usually go for western games like Gears. I don't think they're going to worsen or anything, and they would really only have control if they bump it up 11%

BuzzLiteBeer
BuzzLiteBeer

RIP Epic. China does not know a thing about developing and running a game studio. I can't name a single chinese-based game studio that has made an even half decent game. All the games out of China are F2P and microtransaction based MMO's.

Defender1978
Defender1978

I think it is funny since video games are banned in China.

quantumtheo
quantumtheo

I agree, this is the beginning of the end of Epic being a good company.....

Scarab83
Scarab83

I wonder when the censorship will start.

91210user
91210user

They're not going to get anything. I mean I would be more scared if it was 51%

Alucard_Prime
Alucard_Prime

In other words, don't expect too much from upcoming Epic games titles. 

blackothh
blackothh

i dont like this, i would not be supprised if they start going downhill now.

guitarist1980
guitarist1980

Obviously this move did not go over to well with some of the seniors over at Epic.  This concerns me because I really like Epic a lot but if 40% of there share holders are now interested in FB games and Iphone games.. thats not good for the real gamers.

pimpofdoom
pimpofdoom

in the 80's the big fear in America was Japan today the big fear seems to be China. I wonder how this one is going to play out.

fredwv
fredwv

could be worse.  at least they're now owned by Activision 

weapon_d00d816
weapon_d00d816

Wait, so Rod Ferguson and Cliffy B left and sold 40% of Epic? Guess they were just getting tired of Gears.

BlackSquare
BlackSquare

On the bright side is that the companies will need the government to crack down on piracy. As now it's not hurting US companies, it's hurting Chinese ones as well.

tionmedon
tionmedon

if this keeps going you need to learn mandarin................

starduke
starduke

They say they're "independent" and they have a board of directors, and have stock. That doesn't sound very indie to me.

Adroa
Adroa

Well I suppose since I don't technically own any of the games I bought and paid for, somebody has to.

GenTaylor84
GenTaylor84

capitalism at work, nothing to see here, move along..  move along....

CDWJUSTIN
CDWJUSTIN

soon china will own 40% of all thing in the US

mansiam
mansiam

Oh, wait, I take that back about this being a bad move on Tencent. They now own 40% of the Unreal Engine! Savvy.

YukoAsho
YukoAsho

@Defender1978 That's an urban legend.  The reason you don't see console gaming in China is because China is the piracy capital of the whole world.  It's impossible to make money there if you're not on a pay-to-win model.

parrot_of_adun
parrot_of_adun

@Scarab83 Never. You need a population accustomed to oppression in order to do what the PRC has. No first-world countries have any such populations, stupid as we can be sometimes.

dussan2
dussan2

@pimpofdoom It will play out with Epic games being released in China and not being pirated with the approval of the chinese governemnt.

Its all about money to these clowns, and everyone turns a  blind eye to China because they got the rare earth elements, the labor and the balls to sell it for their benefit only.

CaptWaffle
CaptWaffle

@WantYouBad 

The problem is that China funds a LOT of our enemies and doesn't play by the rules.  They manipulate their currency (weaken or strengthen as needed to get an advantage) whenever and their "economic boom" is mostly just playing with numbers and cheating.  But the main thing is they support nearly EVERY enemy of the US and have a LOT of US blood on their hands.  IF you care about that sort of thing.

CaptWaffle
CaptWaffle

@starduke  

Having a board of directors and stock means the company is confident they'll make money.  Perhaps that means they aren't "Indie" but that means it's more likely they'll make money, thus being around in the future. (I hope they fail miserably, just explaining what having a Board and Stock means.)

Master_Hav0c
Master_Hav0c

@starduke Independent in that they're not owned by a major publisher like Activision

91210user
91210user

@GenTaylor84 That's funny you say that because the video game Capitalism was designed by some Chinese guy.

Nibroc420
Nibroc420

@WantYouBad @pimpofdoom What are you talking about?

No-one uses "1st/2nd/3rd world" anymore, it's a dated classification from the era of the cold war.

China is a "developing country"

pimpofdoom
pimpofdoom

@WantYouBad @pimpofdoom I know. China's low wages are the ace in the hole that they seem to have that gives the country it's competitive advantage over more developed countries. When you look at GDP per capita China is still behind the Western world but when you look at total GDP China is only behind America.

nomadski69
nomadski69

@CaptWaffle @WantYouBad The US funds some of Britains enemies too (Argentina). And they dont play the rules - hence they pretty much forced all of Europe to pay over the odds in fuel for decades by forcing all oil trade to be done in dollars, and NOONE has manipulated their own economy as much as the US as has been brought to light these last few years...

From a different perspective a different truth can always be sought.


Anyway, China has their finger in enough pies around the western world for us to start caring now. That boat has sailed.

blackothh
blackothh

@Nibroc420 @WantYouBad @pimpofdoom evey country on the planet is a developing country

and china has some major hurdles to get over in the human rights and business practices department before i have any respect for that country.