Tencent is an increasingly powerful influence in media and entertainment business around the world, making investments and acquisitions in various major brands. As one of China’s most prominent corporations it also provides a gateway into that market; notably Nintendo teamed up with the company for Switch distribution in the country.
Tencent is now reportedly exploring plans to acquire Crytek (via a subsidiary) for over €300 million – Crytek is known for titles like Crysis (with Crysis Remastered Trilogy on the way to Switch soon) and more recently Hunt: Showdown. Arguably the bigger part of the business is its CryEngine technology / engine, now in its fifth full iteration and used / licensed for a number of third-party games.
News of the German company’s potential acquisition was outline by Bild, which claims that there are concerns around the access it would give Tencent and, potentially, the Chinese government. This is based on the fact that CryEngine is used in some military simulations, for example; the tweets below give a decent summary.
The Bild article is arguably reaching a little; Niko Partners Senior Analyst Daniel Ahmad has stated that it’s no secret that Crytek is talking to potential buyers, and played down the tone of Bild’s report.
Moving beyond talk of military secrets and simulations, it’s yet another potentially big move by Tencent as it continues to obtain controlling stakes and lesser shareholdings in a broad variety of gaming companies.
However people feel about that continued investment, it seems to be an ongoing strategy for the company.