Tencent-Supercell deal bodes well for gamers

Finland is gaining traction as a destination for overseas direct investment from China, notably in the high-tech realm.

Out of all the cross-border transactions involving Chinese companies last year, the second-largest deal was the acquisition of Finnish game developer Supercell by Tencent Holdings, the Chinese internet giant best known for its WeChat app, according to Morning Whistle, a consulting group specializing in international mergers and acquisitions.

Tencent and its partners will pay $8.6 billion for up to 84 percent of Supercell, mostly from SoftBank Group Corp, which aims to use the proceeds to cut its debt.

Tencent President Martin Lau said Supercell would continue to have its headquarters in Finland because it is important for the developer to remain true to its unique culture.

Ilkka Paananen, CEO of Supercell, said the partnership will offer the company exciting growth opportunities in China, where it will be able to reach hundreds of millions of new gamers via Tencent’s channels.

Tencent’s social networking app WeChat has nearly 850 million users and can provide a wide range of services, from hailing taxis to paying bills.

Supercell, developer of the hit title Clash of Clans, has topped the list of data research firm App Annie’s Top 52 publishers for 2014 and 2015 and is one of the most profitable game developers in the world.

It claims it has 100 million daily users around the world. The company’s mobile games are free to download, and Supercell earns money by selling virtual goods that enhance players’ game experiences.

Charlie Dai, principal analyst at Forrester Research Inc, said the deal fits quite well with Tencent’s global strategy at a time when the Shenzhenbased company is seeking to grow beyond China.

The Finnish deal should help Tencent capture about 13 percent of the $100 billion global games market, according to research firm Newzoo.