The video game industry may be set into another consolidation – but it will feel a little bit different than when Microsoft acquired Activision Blizzard King.
As reported by Bloomberg (published on Yahoo Finance), TenCent has reportedly reached out to Nexon to talk about an acquisition. In specific, they’ve reached out to the family of Nexon’s late founder, Kim Jung-Ju. The family is taking the offer seriously and is talking with advisers about their options.
If this follows through, it will be a big deal with a lot of consequences for gaming in East Asia. Of course, the global gaming market will feel reverberations as well, but one can say Western gamers are a bit farther away from the perimeter.
To some degree, Western gamers do know what these two companies are. Nexon is a Korean game company that’s been trying to break through to the West for years. It’s been most recently notorious for The First Descendant, but they’re the same publisher for Dave the Diver, The Finals, The First Berserker: Khazan, and ARC Raiders, which might actually be the one that crosses them over.
Nexon is a giant in Korea for decades, but they’d struggled to break over in the West in spite of their best efforts. Their prior attempts to get into the West include Cliff Bleszinksi’s LawBreakers, Ghost In The Shell: Stand Along Complex – First Assault Online, and Titanfall Online. They also made the non-canon Counter-Strike Online 2.
TenCent is, at least in terms of investment, the biggest video game company in the world. You probably already know they fully own Riot Games, have money in Epic and Larian Studios, and are set to launch a new subsidiary with Ubisoft. Their TiMi Studio Group have distinguished themselves with games like Call of Duty: Online, Pokémon Unite, and their big console and PC title, Delta Force.
TenCent also owns a bit of Krafton, another Korean game company and a direct rival to Nexon. So there’s a potential conflict of interest if this Nexon deal pushes through. TenCent published Nexon’s Dungeon & Fighter Mobile in China to great success, and this success is what prompted their interest in this deal.
Unfortunately for Nexon, while they have been more prodigious in the Western console and PC market, their results have been mixed at best. Dave the Diver is a critically acclaimed hit, but The First Descendant and The Finals are not consistent revenue earners for the company. The company admitted that The First Berserker: Khazan sold below expectations.
Based on TenCent’s MO, this Nexon deal will improve the company’s standing in China, and give them more capital to pursue more projects. So we could get more AAA scaled DNF games like The First Berserker: Khazan, and continue to be allowed to operate independently. But this could also carry unintended consequences, particularly for the Korean game industry. We’ll have to see how this could possibly play out, if this deal actually pushes through.
