Tencent Acquires British Game Dev Sumo Digital For US$1.27 Billion

You may or may not have heard of a British video games developer called Sumo Digital. The studio has done its fair share as a support studio for new entries in the new Hitman series, as well as being the name behind titles like LittleBigPlanet 3 Team Sonic Racing. This developer will soon be under the Tencent umbrella, as the conglomerate has just announced its acquisition of the studio.

CNA reports that Tencent and Sumo Digital have agreed to a US$1.27 billion (~RM5.37 billion) deal. This will see the former acquire the latter, helping the Chinese conglomerate expand its presence globally and also growing its long list of dev teams now under its umbrella. Other developers that are already subsidiaries include the likes of League of Legends developer Riot Games, and Supercell, the company behind the many mobile games like Clash of Clans.

This acquisition comes soon after Tencent’s attempt to merge its own Huya streaming service with DouYu, the shares of which it owns 37%. Speaking of which, prior to the acquisition, Tencent already owns 8.75% of shares in Sumo Digital.

The acquisition of Sumo Digital is the second one Involving a UK-based developer in recent memory. The previous one was when Electronic Arts acquired Codemasters just earlier this year for a similar US$1.2 billion, outbidding previous prospective buyer Take-Two Interactive.

ByteDance Sues Tencent; Seek US$14 Million Compensation For Content Blocking

ByteDance, the parent company of the popular social media app, TikTok, recently sued the Shenzen-based Tencent Holdings (Tencent). It is accusing its social media rival of actively blocking content from Douyin, the Chinese version of TikTok, on the latter’s own platforms, including WeChat and QQ.

The company’s lawsuit comes months after China introduced draft regulations, aimed at online and internet-based companies that engage in monopolistic behaviour. Also, this isn’t the first time ByteDance has taken Tencent to court in China either. According to Bloomberg, ByteDance has filed several lawsuits against its competitor, but this was the first time it was doing so under anti-monopoly grounds.

For the alleged blocking of its links, ByteDance is also seeking US$14 million (~RM56.7 million) in compensation from Tencent. That said and oddly enough, the company did clarify that it was also blocking certain links from WeChat and QQ. Namely, financial and health care-related content, stating that links from such content had a high probability of being scams or illegal tactics via third-party platforms.

At the time of writing, Tencent has not released an official statement regarding its rival lawsuit.

Geely Links Up With Tencent To Develop Smart Car And Driverless Tech

Automotive giant Geely has inked a deal with tech conglomerate Tencent to develop technology for smart vehicle cockpits and self-driving vehicles. This is Geely’s third partnership with a major technology firm in a mere span of a week, showing the company intends to invest and compete aggressively in future tech.

The deal will see the companies working on “next-generation intelligent vehicle cockpits”, enhancing the driver’s cockpit with “new mobile and mobility service applications.” The firms will also “explore simulated testing and validation of autonomous drive systems.” As CNBC noted, Tencent’s cloud computing division and experience in developing artificial intelligence applications might be especially handy here.

Only last week, Geely announced it was forming a new electric car company with Baidu. Days later, it said it was teaming up with Foxconn to provide contract manufacturing and electric vehicle consulting services to other automakers. Sources told Reuters that Geely wanted to make better use of the production capacity of its apparently underutilized Chinese factories.

It should be noted that Tencent has investments in Tesla, the current global leader in electric cars and Geely’s (potential) competitor given its dive into the electric vehicle industry. Relatedly, when it comes to self-driving vehicles, Microsoft also wants a piece of the action – teaming up with General Motors’ subsidiary company Cruise to help boost the commercialisation of autonomous vehicles.

Geely as a whole has been doing exceedingly well, selling over 2.1 million automotive units last year. Proton, its strategic partner here in Malaysia, sold cars like hotcakes despite the COVID-19 pandemic with 8.8% year-on-year growth and has also managed to raise its market share.

US Backs Off Banning Investments in Alibaba, Tencent And Baidu

US government officials backed off a plan to ban American investment in Chinese tech conglomerates Alibaba, Tencent, and Baidu after disagreements emerged within the Trump administration. But as his presidency winds down and under siege from impeachment, President Trump signed an executive order to enhance a ban on US investments in companies allegedly linked to China’s military.

Some US officials pushed for Alibaba, Tencent, and Baidu to be added to an investment blacklist on the account of (allegedly) aiding China’s military, intelligence, and security apparatuses. But sources told Reuters that Treasury Secretary Steven Mnuchin opposed the idea and eventually prevailed over his administration colleagues.

According to the Wall Street Journal (WSJ), Mnuchin and his team feared widespread selloffs and economic fallout had the plan gone through. The firms in question are dauntingly enormous, having tremendous pull across markets. As Bloomberg noted, the combined market value of Alibaba and Tencent exceed US$1 trillion – almost twice the size of Spain’s stock market.

Regardless, President Trump seemed determined to secure his tough-on-China legacy, clarifying and toughening a previous executive order on investments. In addition to being barred from buying securities in companies linked to China’s military, US investors must now get rid of all their holdings in those companies by 11 November this year.

Alibaba, Tencent, and Baidu may have dodged the bullet (for now), but the Trump administration is set to add nine other Chinese firms to its investment blacklist, sources told the WSJ. Top Chinese chipmaker SMIC and oil giant CNOOC were blacklisted just last month. US-China industrial relations should improve under the Biden administration, but by how much is another question.