Tencent is feeling challenged by ByteDance, grabbing every opportunity to go after the TikTok publisher.
In the latest salvo, China’s Tencent is buying Norwegian games developer Funcom, owner of popular games including Conan Exile, for $148 million, the companies said. Tencent, which already owned nearly a third of Funcom shares, offered 27% more than Funcom’s closing price on the Oslo Stock Exchange on Tuesday.
Tencent is seeking to defend its gaming business, following ByteDance tiptoeing in with December’s purchase of Beijing-based AI gaming company Levelup. ByteDance has secretly formed a 1,000-person game developing team, and will launch two games this spring, Bloomberg reported this week.
Tencent is one of China’s three internet giants, along with Baidu and Alibaba, often referred to as BAT. Its businesses range from social media to online and mobile gaming. ByteDance, publisher of the blockbuster, presents a challenge with 750 million users of its video-sharing app TikTok.
Earlier this week, Tencent’s so-called super-app WeChat, that combines social media and payment, announced that it was going to launch video-sharing function within the app, another direct attempt to win back users from TikTok. WeChat’s 1 billion daily active users is a few steps ahead of the combined 800 million from TikTok and Kuaishou, another popular video-sharing app, suggesting video-sharing remains a battle Tencent won’t concede.
Regarding the timing of the deal, Tencent can’t afford to stand by during the upcoming Lunar New Year. Since the red envelope tradition moved smartphones in 2014, giving out money, or red envelopes, became big business for Internet companies. Companies seek to grab parts of the mobile payment market by encouraging customers to link their bank accounts. TikTok and Kuaishou will give out $2 billion and $1 billion cash to its users this Lunar New Year, according to Caijing.