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Tencent is acquiring a majority stake in Klei Entertainment

124 points by doppp 6y ago

justicezyx 6y ago
Tecent has been actually allowing independency for most of previously acquired studios. Seems a good deal for the team. Also it's well known that the Chinese creative market is a bit brain-fucked, in the sense the cut-throat competition drives a lot of studios focusing on trial-and-true designs, results into significant duplication of ideas and implementations. They kind of require talents from a different environment to produce something that is novel to Chinese market.
- eunos 6y ago
  I think it's just Tencent that are too money oriented, instead of Chinese gamedev environment as a whole that fucked up. To be fair, a lot of famous Chinese game are gacha/microtransaction since China is mobile first environment. Console gaming only gained traction recently.
  - justicezyx 6y ago
    Happy to see your sources. I was born and raised in mainland until leaving for US at 24 in 2008. Never saw much original games from Chinese studios. A lot of games are purely sexuality saturated cheap games, on both web and mobile. Pay to win is very popular.
    - alisonatwork 6y ago
      Chinese indie games got more interesting around 蜡烛人 Candleman in 2017. Personally I didn't enjoy that game, a bit too much trial and error, but it is a "real" platform game. I have been trying various other ones to try find something really creative and unique, and the best one I have found is called Another Adventure from ThankCreate Studio. This one is neat, a bit of a commentary on high tech/programmer/996 lifestyle. Another game I liked was 雨纪 Flood of Light. It is a fairly simple puzzle game, very low stress and easy, with a bit of sad anime style story. There was a very relaxing fish sim too called 鲤 Koi. I am a bit out of the loop, I think it's hard to keep up with all the latest indie games if you are not following local media, but it definitely feels like last 3-4 years there is a small and growing scene. Some games even translated in English and got some press in western media too, like Tales of the Neon Sea. Of course, the vast majority of games are still pay to win, anime style clickers, not really my thing at all.
      - eunos 6y ago
        Check Dyson Sphere. Looks interesting
  - sudosysgen 6y ago
    This is anecdotal but the gacha in Genshin Impact is quite reasonable and you can get really excellent characters and builds without paying a penny if you do it smart. You get enough free premium currency to get a 100% chance of getting at least one top-tier character (on average you'll get two or three) (and obviously many excellent but not top-tier ones besides) as long as you spend it carefully, and every month or two there's a free really good character too. It's definitely much more PC-oriented than mobile oriented, though. For a mainly single player game the monetization is not bad. That said it still isn't optimal, and the issue of power-creep is not even taken into account yet
    - eunos 6y ago
      Gacha in Genshin is nasty unless you are not greedy and contend playing F2P or limited 5* characters. Anyway the correct thing mihoyo done with Genshin is that in addition to make a very good game (AAA tier for free), their community is also excellent and releasing MMD models for free allows fans keep making meme out it.
      - viraptor 6y ago
        > unless you are not greedy and contend playing F2P or limited 5* characters That honestly sounds reasonable to me. I don't see that deal as nasty. There's so much content, I didn't miss the extra characters at all. I actually almost completely missed the idea that there are more characters, so when I got the free extra one, I just though "oh, that's cool". It doesn't limit your gameplay unless you really want to grind and complete 100% of Genshin. (and at that point you're sinking many hours a day - maybe it's worth paying for?) It's emphatically not "pay to win".
      - sudosysgen 6y ago
        I am fully F2P and have Keqing, Mona, Jean, Albedo, Fischl, Barbara, Xiangling, Razor, Xingqui, Beidou, Xinyan, and Noelle. I honestly don't think I'm missing much. I could use a Cryo or Pyro 5*, but it's perfectly fine. I did get somewhat lucky, but I was able to do ~130 free gacha rolls and have enough gems left for around 20 more, so it's not outside of expectations. I think it is fine. You can always lust after more characters but really, if you spend your primogems wisely, there is no real need beyond what you can get for free. I also appreciate the resin system that removes the incentive to spend too much time on the game. It limits me to 45 minutes a day which undoubtedly costs MiHoYo a lot but is appreciated. If you run the numbers, every day you can as a F2P player get enough for a 1.6-2.2% probability at a 5* character, so around 40-60% at a 5* every month. For this you have to be patient and game the pity system, though.
  - em500 6y ago
    Console sales were banned in China from 2000-2015, which is why the industry grew into a PC-first environment. https://en.wikipedia.org/wiki/Video_games_in_China https://en.wikipedia.org/wiki/Video_games_in_China
- Barrin92 6y ago
  I think this take is correct. Path of Exile players also made a lot of noise in 2018 but the game developers seem to be able t do their thing. Fortnite and League are still obviously hugely successful as well.
  - fermentation 6y ago
    An interesting development since the Path of Exile acquisition is a Chinese client that has a bunch of features players everywhere else in the world have been asking for since the game's inception (notably macro support to prevent RSI).
- wyldfire 6y ago
  > Also it's well known that the Chinese creative market is a bit brain-fucked ... lot of studios focusing on trial-and-true designs IMO Don't Starve is a really enjoyable, very original game. Not sure about Klei's other titles, but maybe having an acquisition that's outside of the routine Chinese game studio is what they're after? Especially if the native teams are as homogeneous as you say.
  - scruple 6y ago
    My wife and I play DST together every other weekend on both Friday and Saturday nights. We've been playing it for years now. Oxygen Not Included is also really good. As is Mark of the Ninja. Highly recommended. I haven't gotten to Invisible, Inc. yet but I've heard great things.
- dijit 6y ago
  This is true, I work for Sharkmob. There’s significantly less interference here (a wholly owned company) than there was at Ubisoft (a 5% owned company - whom I also used to work for)
seneca 6y ago
Disappointing to see yet another Western entertainment company fall under the sway of the CCP.
SimianSci 6y ago
Interesting observations about the Chinese economy right now. The lax IP protections have allowed for incredible innovation in hardware and software. Everybody copies each other shamelessly, driving relentless competition. But when it comes to creative properties its practically bankrupt. A lot of market movers are just copying each other and lack the capability to make anything transformative. Their gaming market seems flooded with hundreds of mobile companies with near identical products. It doesn't surprise me that Chinese investment firms are chomping at the bit to acquire more creative properties from other countries. They really dont have to do much other than localize the acquired properties and release them to a market starved for good games. Its a smart investment, in my eyes.
- catmanjan 6y ago
  Is this conjecture or do you have proof?
  - SimianSci 6y ago
    Admittedly, conjecture based on observation
- FooBarWidget 6y ago
  It's a double-edged sword. There are Chinese businessmen who chose not to do business in China, restricting themselves to foreign markets, because they are worried about IP theft in China. But the situation is slowly improving. IP protection laws, as well as general rule of law, are slowly improving. Whereas 10 years ago IP protection wasn't much of a priority for the central government, it is now a prioritity.
- ZirianDrake 6y ago
  A new robotic vacuum cleaner isn't going to offend Communist leaders, but a bold new TV show or video games series might. This chilling effect is the factor behind limited creative output.
vlozko 6y ago
I’m a long time fan of Don’t Starve Together and this news is just disappointing. What frustrates me most, though, is that China is able to operate here in the US independently whereas it’s much more likely it won’t be reciprocated.
- riq_ 6y ago
  What frustrates me most is that USA can organize coup d'etat in Latin America and other countries, whereas it is much more likely it won't be reciprocated.
  - psaux 6y ago
    Can you please expand and add some links? As someone who worked for Latin banks and lived globally, I would like to hear more.
    - FooBarWidget 6y ago
      https://en.m.wikipedia.org/wiki/Operation_Gideon_(2020) https://en.m.wikipedia.org/wiki/Operation_Gideon_(2020) This is just the tip of the iceberg. It's world-wide. Iran, China, the list goes on.
      - dmix 6y ago
        > In December 2019, Secretary of State Mike Pompeo stated that the United States did not plan a military intervention in Venezuela, saying that "we have said that all options are on the table", but that "we have learned from history that the risks from using military force are significant". There has been zero proven connection between that operation with any US gov office nor even Guaidó himself. It was 100% amateur hour and initiated by a con man’s security company.
      - brahyam 6y ago
        As a Venezuelan and victim of Maduro's constant anti imperialist propaganda I strongly believe the operation gedeon is just a fake. If the US would like to remove Maduro from power I don't think they would send 30 poorly trained, barely equipped men, from which the grand majority didn't even have military experience to disembark in one of the most popular coasts of Venezuela just a few kilometers from a navy base. If you want to read more from a great independent news site https://www.caracaschronicles.com/2020/05/05/the-macutazo-timeline-of-an-absurd-military-adventure/ https://www.caracaschronicles.com/2020/05/05/the-macutazo-ti...
deleted 6y ago
[deleted]
haunter 6y ago
Full ownership of Riot Games Full ownership of Norwegian publisher Funcom. Full ownership of Swedish developer Sharkmob 80% ownership in the New Zealand company Grinding Gear Games Approximately 84% ownership in Finnish mobile game developer Supercell 40% ownership of American developers Epic Games 20% ownership of Japanese publisher and developer Marvelous which owns G-Mode and the majority of Data East's intellectual properties 17.66% ownership of South Korean mobile developer Netmarble. Approximately 15% ownership of American mobile game developer Glu Mobile 13.54% ownership of South Korean company Kakao, the parent company of South Korean publisher Kakao Games. 9% ownership in UK developer Frontier Developments 5% ownership of American holding company Activision Blizzard, the parent company of Activision, Blizzard and King 5% ownership of Swedish publisher Paradox Interactive 5% ownership in France's Ubisoft 1.5% ownership of South Korean company Bluehole Majority ownership in Switzerland-based mobile game developer Miniclip Capital Investment in Japanese developer PlatinumGames Capital Investment in Reddit Minority share in German developer Yager Development Minority ownership of French mobile game developer Voodoo Major share in Sweden's 10 Chambers Collective Majority ownership of Canadian Klei Entertainment.
- dirtyid 6y ago
  Somewhat tangent ownership factoid. ~30% of Tencent is owned by South African multinational Naspers.
  - actuator 6y ago
    Huh, that's a lot. With what happened with Jack Ma, I am not sure how comfortable outside companies are with holding that much stake in a company in PRC. News reports seemed to indicate even Tencent was under scanner along with Alibaba.
    - ReptileMan 6y ago
      Well ... Jack Ma was epitome of play stupid games, win stupid prizes. He knows from inside out how the CCP system works and how to push criticism about the system (subtly, privately). It is not as if he doesn't have Xi or any other high level party official on quickdial.
ZirianDrake 6y ago
The underlying factor here is the 30% commission charged by Valve corporation - which is fundamentally uneconomic. If Tencent can move Klei games (new or old) off Steam, and onto a platform they control (ie. Epic Games Store), then they have boosted PC revenue by 32.5% (accounting for the 60% of Epic games owned by Tim Sweeny) just from this single change. Now admittedly this is just the PC portion of sales, which probably account for roughly 50% of total sales. These economics are the same for all other acquisitions by platform holders. If you don't like it, then agitate for Valve, Sony, Microsoft, Google, Apple to reduce their commissions to 10-15% - or for Governments to do it for them.
icefrakker 6y ago
As a fan very disappointing. I imagine dunking on the CCP while living in China is the real life version of one of their games.
kemonocode 6y ago
Interesting. Can't say I'm particularly excited about Tencent snatching up yet another game studio, and they (Klei) were expecting backlash for sure which is why they prefaced with how they're maintaining autonomy when it comes to creative decisions and to be fair, Tencent has been fairly respectful in that regard with other studios... but one does not make an acquisition just to have it bleed money so I expect the level of screw-tightening to vary according to any future games' successes. If they're successful in spite, and not because of their new overlords, I have little reason to believe things would change much- why kill the golden goose, after all? But if things don't go as wanted...
monadic3 6y ago
I hope this frees up engineering talent for new studios to grow. I doubt it, though.

124 points by doppp 6y ago

Tecent has been actually allowing independency for most of previously acquired studios. Seems a good deal for the team. Also it's well known that the Chinese creative market is a bit brain-fucked, in the sense the cut-throat competition drives a lot of studios focusing on trial-and-true designs, results into significant duplication of ideas and implementations. They kind of require talents from a different environment to produce something that is novel to Chinese market.

eunos 6y ago
I think it's just Tencent that are too money oriented, instead of Chinese gamedev environment as a whole that fucked up. To be fair, a lot of famous Chinese game are gacha/microtransaction since China is mobile first environment. Console gaming only gained traction recently.
- justicezyx 6y ago
  Happy to see your sources. I was born and raised in mainland until leaving for US at 24 in 2008. Never saw much original games from Chinese studios. A lot of games are purely sexuality saturated cheap games, on both web and mobile. Pay to win is very popular.
  - alisonatwork 6y ago
    Chinese indie games got more interesting around 蜡烛人 Candleman in 2017. Personally I didn't enjoy that game, a bit too much trial and error, but it is a "real" platform game. I have been trying various other ones to try find something really creative and unique, and the best one I have found is called Another Adventure from ThankCreate Studio. This one is neat, a bit of a commentary on high tech/programmer/996 lifestyle. Another game I liked was 雨纪 Flood of Light. It is a fairly simple puzzle game, very low stress and easy, with a bit of sad anime style story. There was a very relaxing fish sim too called 鲤 Koi. I am a bit out of the loop, I think it's hard to keep up with all the latest indie games if you are not following local media, but it definitely feels like last 3-4 years there is a small and growing scene. Some games even translated in English and got some press in western media too, like Tales of the Neon Sea. Of course, the vast majority of games are still pay to win, anime style clickers, not really my thing at all.
    - eunos 6y ago
      Check Dyson Sphere. Looks interesting
- sudosysgen 6y ago
  This is anecdotal but the gacha in Genshin Impact is quite reasonable and you can get really excellent characters and builds without paying a penny if you do it smart. You get enough free premium currency to get a 100% chance of getting at least one top-tier character (on average you'll get two or three) (and obviously many excellent but not top-tier ones besides) as long as you spend it carefully, and every month or two there's a free really good character too. It's definitely much more PC-oriented than mobile oriented, though. For a mainly single player game the monetization is not bad. That said it still isn't optimal, and the issue of power-creep is not even taken into account yet
  - eunos 6y ago
    Gacha in Genshin is nasty unless you are not greedy and contend playing F2P or limited 5* characters. Anyway the correct thing mihoyo done with Genshin is that in addition to make a very good game (AAA tier for free), their community is also excellent and releasing MMD models for free allows fans keep making meme out it.
    - viraptor 6y ago
      > unless you are not greedy and contend playing F2P or limited 5* characters That honestly sounds reasonable to me. I don't see that deal as nasty. There's so much content, I didn't miss the extra characters at all. I actually almost completely missed the idea that there are more characters, so when I got the free extra one, I just though "oh, that's cool". It doesn't limit your gameplay unless you really want to grind and complete 100% of Genshin. (and at that point you're sinking many hours a day - maybe it's worth paying for?) It's emphatically not "pay to win".
    - sudosysgen 6y ago
      I am fully F2P and have Keqing, Mona, Jean, Albedo, Fischl, Barbara, Xiangling, Razor, Xingqui, Beidou, Xinyan, and Noelle. I honestly don't think I'm missing much. I could use a Cryo or Pyro 5*, but it's perfectly fine. I did get somewhat lucky, but I was able to do ~130 free gacha rolls and have enough gems left for around 20 more, so it's not outside of expectations. I think it is fine. You can always lust after more characters but really, if you spend your primogems wisely, there is no real need beyond what you can get for free. I also appreciate the resin system that removes the incentive to spend too much time on the game. It limits me to 45 minutes a day which undoubtedly costs MiHoYo a lot but is appreciated. If you run the numbers, every day you can as a F2P player get enough for a 1.6-2.2% probability at a 5* character, so around 40-60% at a 5* every month. For this you have to be patient and game the pity system, though.
- em500 6y ago
  Console sales were banned in China from 2000-2015, which is why the industry grew into a PC-first environment. https://en.wikipedia.org/wiki/Video_games_in_China https://en.wikipedia.org/wiki/Video_games_in_China
Barrin92 6y ago
I think this take is correct. Path of Exile players also made a lot of noise in 2018 but the game developers seem to be able t do their thing. Fortnite and League are still obviously hugely successful as well.
- fermentation 6y ago
  An interesting development since the Path of Exile acquisition is a Chinese client that has a bunch of features players everywhere else in the world have been asking for since the game's inception (notably macro support to prevent RSI).
wyldfire 6y ago
> Also it's well known that the Chinese creative market is a bit brain-fucked ... lot of studios focusing on trial-and-true designs IMO Don't Starve is a really enjoyable, very original game. Not sure about Klei's other titles, but maybe having an acquisition that's outside of the routine Chinese game studio is what they're after? Especially if the native teams are as homogeneous as you say.
- scruple 6y ago
  My wife and I play DST together every other weekend on both Friday and Saturday nights. We've been playing it for years now. Oxygen Not Included is also really good. As is Mark of the Ninja. Highly recommended. I haven't gotten to Invisible, Inc. yet but I've heard great things.
dijit 6y ago
This is true, I work for Sharkmob. There’s significantly less interference here (a wholly owned company) than there was at Ubisoft (a 5% owned company - whom I also used to work for)

seneca 6y ago

Disappointing to see yet another Western entertainment company fall under the sway of the CCP.

SimianSci 6y ago

Interesting observations about the Chinese economy right now. The lax IP protections have allowed for incredible innovation in hardware and software. Everybody copies each other shamelessly, driving relentless competition. But when it comes to creative properties its practically bankrupt. A lot of market movers are just copying each other and lack the capability to make anything transformative. Their gaming market seems flooded with hundreds of mobile companies with near identical products. It doesn't surprise me that Chinese investment firms are chomping at the bit to acquire more creative properties from other countries. They really dont have to do much other than localize the acquired properties and release them to a market starved for good games. Its a smart investment, in my eyes.

catmanjan 6y ago
Is this conjecture or do you have proof?
- SimianSci 6y ago
  Admittedly, conjecture based on observation
FooBarWidget 6y ago
It's a double-edged sword. There are Chinese businessmen who chose not to do business in China, restricting themselves to foreign markets, because they are worried about IP theft in China. But the situation is slowly improving. IP protection laws, as well as general rule of law, are slowly improving. Whereas 10 years ago IP protection wasn't much of a priority for the central government, it is now a prioritity.
ZirianDrake 6y ago
A new robotic vacuum cleaner isn't going to offend Communist leaders, but a bold new TV show or video games series might. This chilling effect is the factor behind limited creative output.

vlozko 6y ago

I’m a long time fan of Don’t Starve Together and this news is just disappointing. What frustrates me most, though, is that China is able to operate here in the US independently whereas it’s much more likely it won’t be reciprocated.

riq_ 6y ago
What frustrates me most is that USA can organize coup d'etat in Latin America and other countries, whereas it is much more likely it won't be reciprocated.
- psaux 6y ago
  Can you please expand and add some links? As someone who worked for Latin banks and lived globally, I would like to hear more.
  - FooBarWidget 6y ago
    https://en.m.wikipedia.org/wiki/Operation_Gideon_(2020) https://en.m.wikipedia.org/wiki/Operation_Gideon_(2020) This is just the tip of the iceberg. It's world-wide. Iran, China, the list goes on.
    - dmix 6y ago
      > In December 2019, Secretary of State Mike Pompeo stated that the United States did not plan a military intervention in Venezuela, saying that "we have said that all options are on the table", but that "we have learned from history that the risks from using military force are significant". There has been zero proven connection between that operation with any US gov office nor even Guaidó himself. It was 100% amateur hour and initiated by a con man’s security company.
    - brahyam 6y ago
      As a Venezuelan and victim of Maduro's constant anti imperialist propaganda I strongly believe the operation gedeon is just a fake. If the US would like to remove Maduro from power I don't think they would send 30 poorly trained, barely equipped men, from which the grand majority didn't even have military experience to disembark in one of the most popular coasts of Venezuela just a few kilometers from a navy base. If you want to read more from a great independent news site https://www.caracaschronicles.com/2020/05/05/the-macutazo-timeline-of-an-absurd-military-adventure/ https://www.caracaschronicles.com/2020/05/05/the-macutazo-ti...

deleted 6y ago

[deleted]

haunter 6y ago

Full ownership of Riot Games Full ownership of Norwegian publisher Funcom. Full ownership of Swedish developer Sharkmob 80% ownership in the New Zealand company Grinding Gear Games Approximately 84% ownership in Finnish mobile game developer Supercell 40% ownership of American developers Epic Games 20% ownership of Japanese publisher and developer Marvelous which owns G-Mode and the majority of Data East's intellectual properties 17.66% ownership of South Korean mobile developer Netmarble. Approximately 15% ownership of American mobile game developer Glu Mobile 13.54% ownership of South Korean company Kakao, the parent company of South Korean publisher Kakao Games. 9% ownership in UK developer Frontier Developments 5% ownership of American holding company Activision Blizzard, the parent company of Activision, Blizzard and King 5% ownership of Swedish publisher Paradox Interactive 5% ownership in France's Ubisoft 1.5% ownership of South Korean company Bluehole Majority ownership in Switzerland-based mobile game developer Miniclip Capital Investment in Japanese developer PlatinumGames Capital Investment in Reddit Minority share in German developer Yager Development Minority ownership of French mobile game developer Voodoo Major share in Sweden's 10 Chambers Collective Majority ownership of Canadian Klei Entertainment.

dirtyid 6y ago
Somewhat tangent ownership factoid. ~30% of Tencent is owned by South African multinational Naspers.
- actuator 6y ago
  Huh, that's a lot. With what happened with Jack Ma, I am not sure how comfortable outside companies are with holding that much stake in a company in PRC. News reports seemed to indicate even Tencent was under scanner along with Alibaba.
  - ReptileMan 6y ago
    Well ... Jack Ma was epitome of play stupid games, win stupid prizes. He knows from inside out how the CCP system works and how to push criticism about the system (subtly, privately). It is not as if he doesn't have Xi or any other high level party official on quickdial.

ZirianDrake 6y ago

The underlying factor here is the 30% commission charged by Valve corporation - which is fundamentally uneconomic. If Tencent can move Klei games (new or old) off Steam, and onto a platform they control (ie. Epic Games Store), then they have boosted PC revenue by 32.5% (accounting for the 60% of Epic games owned by Tim Sweeny) just from this single change. Now admittedly this is just the PC portion of sales, which probably account for roughly 50% of total sales. These economics are the same for all other acquisitions by platform holders. If you don't like it, then agitate for Valve, Sony, Microsoft, Google, Apple to reduce their commissions to 10-15% - or for Governments to do it for them.

icefrakker 6y ago

As a fan very disappointing. I imagine dunking on the CCP while living in China is the real life version of one of their games.

kemonocode 6y ago

Interesting. Can't say I'm particularly excited about Tencent snatching up yet another game studio, and they (Klei) were expecting backlash for sure which is why they prefaced with how they're maintaining autonomy when it comes to creative decisions and to be fair, Tencent has been fairly respectful in that regard with other studios... but one does not make an acquisition just to have it bleed money so I expect the level of screw-tightening to vary according to any future games' successes. If they're successful in spite, and not because of their new overlords, I have little reason to believe things would change much- why kill the golden goose, after all? But if things don't go as wanted...

monadic3 6y ago

I hope this frees up engineering talent for new studios to grow. I doubt it, though.