Chinese tech giant NetEase buys Star Wars game maker Quantic Dream

Chinese gaming giant NetEase has been aggressively expanding overseas as the domestic market slows amid tighter regulations. It now has wholly-owned game studios in the US, Europe, and Japan as it focuses on games beyond mobile and PC.

Arjun Kharpal | CNBC

NetEase announced on Wednesday that it has acquired a French game developer as the Chinese tech giant continues its aggressive international expansion.

The Hangzhou, China-based company has purchased Quantic Dream, marking the creation of its first wholly-owned game studio in Europe.

NetEase and rival Tencent have stepped up efforts overseas as China’s gaming market slows amid tighter regulations.

Over the years, Tencent has been prolific in acquiring and investing in overseas game companies. NetEase is now catching up.

This year alone, NetEase has set up game studios in Japan and the United States

NetEase has generally focused on PC and mobile games, formats that are hugely popular in China. Mobile games account for more than half of its global gaming revenue. But more recently, the tech giant has branched out into console gaming.

Quantic Dream, a 25-year-old studio, will focus “on creating and publishing its video games across all platforms, as well as supporting and publishing titles developed by third parties,” according to a press release.

This highlights NetEase’s intention to expand across mobiles, PCs and consoles.

The acquisition of Quantic Dream is part of NetEase’s strategy to acquire well-known international characters and franchises. Quantic Dream is currently developing a game called Star Wars Eclipse, based on Disney’s space adventure movies. NetEase has already released mobile games based on Lord of the Rings and Harry Potter.

NetEase’s international push comes as Chinese regulators continue to monitor the gaming market, although there are signs of some easing. Last year, authorities limited the time that under-18s could play games online and froze the approval of new titles. In China, games need the green light from regulators to be marketed and monetized. These approvals restarted in April.

In an interview with CNBC last year, Hu Zhipeng, vice president of NetEase and a top boss in the tech giant’s video game business, said he was aiming for 50% of The company’s gaming revenue comes from overseas, up from around 10% now.

Competition in the global gaming market is intensifying.

Sony, the leader in console gaming and producer of the PlayStation, announced on Tuesday the creation of a dedicated mobile division, which will put it in competition with Chinese giants Tencent and NetEase.

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