06.08.20 - Chinese game giant Tencent has bought a stake of between 70% and 80% in Czech Republic–based videogame developer Bohemia Interactive for around $260 million, according to a person familiar with the matter. The investment is the latest in a swath of deals Tencent has made in Europe to bolster its overseas videogame business amid tighter regulations in China.
It also comes as the Covid pandemic has given a lift to gaming, which accelerated Tencent’s gaming revenue growth to 31% in the first quarter, faster than its annual pace last year of 10%. Tencent declined to comment. Bohemia didn’t immediately respond to a request for comment.
In January, Tencent bought Norway’s Funcom, creator of the massively multiplayer online role-playing game Anarchy Online, in a deal valuing that game studio at around $140 million. In February, it took an undisclosed minority stake in Germany’s Yager, which is working on a first-person shooter called The Cycle. These both follow Tencent’s biggest gaming acquisition in Europe, its $8.6 billion purchase in 2016 of Finland-based Supercell, a mobile-game developer.
As Chinese Tech Companies are being locked out from American Tech Deals by a combative White House protecting American consumers from CCP controlled companies, it is almost an eerie reminder of the Dutch Colonial Strategy also commonly referred to as the Dutch Disease.
The Dutch Colonial Strategy was largely financial leveraging its power abroad through capital and debt - a practice China has previously mimicked with investments across the globe from Pakistan to Africa in pursuit of its Belt and Road vision. Now we’re seeing a pattern of Chinese companies wrapping Europe in a capital bear hug from Huawei to Tencent in the face of its diminishing political influence within European Governments.
This pattern is alarming, following revelations surfacing of CCP soft power propaganda being pushed across Apps such as Chinese owned Byte Dance’s Tik-Tok, one of the most popular Apps in the world.
Alarm bells should be raised and it should be assumed that China’s strategy is to vacuum data & information from western consumers, as well as further entrench itself into the west through investment.
Source: The Information