Gears of War studio sells minority stake to Chinese Internet company

Epic Games inks deal with Tencent Holdings that will see US shop remain independent; terms of the deal not announced.

Epic Games--developer of big-name franchises like Gears of War and Infinity Blade, as well as the ubiquitous Unreal Engine technology--announced this morning that it has sold a minority stake of its business to Chinese Internet company Tencent Holdings. Terms of the deal were not announced.

Epic Games is now owned in part by Tencent.

As part of the deal--expected to close this month--Epic will remain an independent entity and will continue to "further expand its game franchises across multiple platforms." Epic and Tencent have a longstanding relationship, as the Chinese company is a current licensee of Epic's Unreal Engine technology.

Speaking to North Carolina newspaper News & Observer, Epic CEO Tim Sweeney explained that a partnership with Tencent will allow the Cary, North Carolina-based developer to tap into the Chinese company's worldwide user base.

"Tencent has by far the largest gaming customer base in China and really impressive and growing operations throughout the rest of Asia and in South America," Sweeney said. "Basically, wherever Epic is not, Tencent is…in a big way."

Sweeney went on to claim that Epic's deal with Tencent was not spurred by the cash it stands to generate from the investment, but rather the opportunities now possible.

"Epic has always been very profitable," he said. "We often have a hard time figuring out how to deploy the money that we do have efficiently, given the amounts that games like Gears of War and Infinity Blade produce."

Tencent Holdings already has a foothold in the US game market, as it currently owns a majority stake in League of Legends developer Riot Games.

Written By

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.

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Discussion

23 comments
BlackSquare
BlackSquare

Get ready to lose money. China pirates everything and never pays royalties. It might work for a gaming company because there are little patients to be held. Maybe just the source engine will be pirated by Chinese companies.

 

But most companies partnering with a Chinese company to get access to a 1 billion person market place is not worth it. Considering all the money that will be lost in the long run due to your patients being on the open market. As long a Epic is willing to lose that, they can make some serious cash if the Chinese actually buy their games.

 

cr8ive
cr8ive

Tencent? Wooohooo!!

That means more booth babes, and scantily clad models doing the advertisement for future Epic Games!!

 

What? I can't help it, I'm just being a guy! >:P

 

On the other hand, tencent previously only deals in MMO free-to-play stuff... so maybe it's best to keep their stake at a minimum....

bigtuna001
bigtuna001

Oh really Agronot I didn't know that

Agronot
Agronot

I find it funny how many of you are bashing China, but have you ever looked on the labels of your clothes and boxes of the electronics you buy (ie iPods, iPads, laptops, games, cell phones, etc). 90% chance it's made in China. So if you want to accuse any one of being communist or bash people....LOOK IN THE MIRROR! Ignorance...what a shame!

tightwad34
tightwad34

I am not a fan of Gears, but that screenshot looks amazing.

y3ivan
y3ivan

So thats how the commies going to occupy the US of A

naryanrobinson
naryanrobinson

All companies in China are under the complete control of the government.

 

All of Tencents software is horrific government spyware and shouldn't be on any computer.

Richardthe3rd
Richardthe3rd

Gives them some income during the between-generation float period so they can reconfigure and develop for new technology.

Since consoles have been their main source of revenue, this is a pretty smart move in a lot of ways.

JACOBDRAGON666
JACOBDRAGON666

yeah follow the US economy because that worked so well for us before xD

Roger_Smith
Roger_Smith

So Epics makes more money than it knows what to do with? Literally the first time I've ever heard a game company make that statement. Usually it's the other way around.

FireHawk2518
FireHawk2518

The one thing they don't state in the article is what "opportunities" this opens for the two parties. In other words, why did Epic sign this deal? Kind of an important detail if you ask me. I'm not saying it's GameSpot's fault, just that Tim Sweeney wasn't very forthcoming with information.

Zero5000X
Zero5000X

I wonder if Microsoft is still going to be able to get them to keep the Gears of War franchise exclusive in the future...

PixelAddict
PixelAddict

Gears of War and Infinity Blade, he just mentioned two of my favorite game franchises.

 

Good move in a tough environment... being profitable as a gaming company has now shown to be easy these past 6-12 months.  Good on them.

SuprSaiyanRockr
SuprSaiyanRockr

Cool, now they can tap into the Chinese internet and access all the censored goodness.

sirkibble2
sirkibble2

I'm not sure how the entirety of this all works out but staying independent in this industry and putting out AAA games is a plus.

ydnarrewop
ydnarrewop

Good for them. Seems like it will be a profitable endeavour  :)

shadow-crow
shadow-crow

 @LongJohnSlivers are you mentally disabled? if you are I'll leave you alone other wise I feel obligated to give you a hard time and hope you LEAVE

 

Kronical42
Kronical42

 @JACOBDRAGON666 There not following suit. This is no different then when we sold a lot of our highways to foreign investors. it's one of the main reasons were in this economic situation, but there just taking advantage, far form "follow suit".

FireHawk2518
FireHawk2518

Oh, alright, it mentions being able to tap into Tencent's userbase. Must have missed that and assumed they were being intentionally vague like businesses often are. Sounds like a good move, then.

tduhon07
tduhon07

 @sirkibble2 So long as the majority of shares are controlled by EPIC, they can decide where they go creatively. Having the majority of your shares bought out is essentially being bought out.

sirkibble2
sirkibble2

 @tduhon07 I appreciate that comment. Thank you. Simple explanation. I learned something today. :)