China's online games companies buy overseas
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Since the beginning of this year, Chinese online games companies have turned to acquisitions to accelerate their development, China Securities Journal reported Saturday.
In January, Shanda Games acquired Mochi Media, an online games publisher and advertising network, for US$60 million in cash and US$20 million in shares. In March, The9, former Chinese operator of World of Warcraft, acquired a majority stake in US-based developer Red Studios for US$20 million. Also in March, Perfect World Entertainment bought Japanese online game operator C C Media for US$21 million.
"If these Chinese companies want to become real international internet companies, they need to enter other markets besides their domestic market," said Citigroup analyst Alicia Yap. "They should be like Google, appearing everywhere around the world."
Fierce competition in the domestic market may have led the online games companies to expand overseas. In the first quarter of 2010, revenue growth in China's online games industry dropped to only 4.1 percent. Analysts say excess supply and product similarity are the reasons behind poor performance.
China's business press carried the story above on Saturday. China.org.cn has not checked the stories and does not vouch for their accuracy.
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