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Tencent acquires a minority stake in Dontnod Entertainment

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The team behind adventure and narrative titles like Life is Strange, Tell Me Why, and Vampyr has a new investor this week thanks to a new deal with Tencent.

Dontnod CEO Oskar Guilbert says the deal will help Dontnod take “advantage of the various growth drivers in the video game industry, in particular in China and on mobile platforms, in cooperation with an industry leader.”

And it looks like there could be a big push in China for the developer in the future. A lot of Tencent’s interest lies in expanding the already explosive gaming market in the region. There’s a rich market of millions of Chinese gamers that’s waiting to be sold products, And because of the way Chinese businesses get preferential treatment in the country in myriad ways, Tencent is positioned in a key spot to take advantage and make bank.

Tencent, which is one of China’s largest tech companies—comparable to Microsoft in terms of value—is making big moves, and doesn’t look to be slowing down.

The deal is valued at €40 million and gives Dontnod a needed capital injection to keep their interests going. The company will now use this to pursue self-publishing future games and funding future development. €30 million came from Tencent subsidiary Proxima Beta Europe BV. It’s important to note that this deal is about a cooperation agreement between Tencent and Dontnod, Tencent does not own the latter company now. Tencent can appoint a member to the board of directors for the company though, giving them some degree of control over the direction and marketing of future games.

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Tencent also recently bought a full stake in Klei Entertainment, the team behind Don’t Starve. It seems as though the Chinese mega-firm is banking on more success in the indie games scene in 2021 and beyond. It’s a pretty strong bet if the games they’re interested in are any indication of the quality of the studios.

Further back in time, Tencent also invested in bigger names, like the parent company behind Warframe, as well as Spec Ops The Line developer Yager. Those deals were full buyouts, so worth a lot more than the Dontnod deal we’re finding out about today.

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