Tencent to Buy 20% Stake in Japan’s Marvelous Inc.

Wall Street learned this week that Tencent will become the largest shareholder in Japan’s Marvelous Inc. The former is buying a 20% stake of the latter.

The Japanese game maker announced that Tencent, through affiliate Image Frame Investment, will spend about 7 billion yen ($65 million) to buy stock in the company.

Marvelous will sell 8.62 million new shares for 576 yen apiece, while shareholders Amuse Capital and Nakayama Hayao will sell 2.83 million and 708,600 shares respectively at the same price.

Marvelous has said it plans to use the money to build out its existing game franchises and launch new ones over the next three years. The company’s current titles include Story of Seasons and Deamon X Machina.

“Tencent’s reason for the investment is probably to learn how to make console games from Japanese companies, one of the last frontiers for the Chinese tech company’s game business,” commented Hideki Yasuda, an analyst at Ace Research Institute. “The investment will help Marvelous ride through the period of global economic uncertainty, and release more of its domestically-popular titles to the Western market.”

“Tencent is after the magic of Japanese companies creating ‘otaku’ geek-orientated content,” said Serkan Toto, founder of game industry consultancy Kantan Games.

Disclaimer: We have no position in TENCENT HOLDING/ADR (OTCMKTS: TCEHY) and have not been compensated for this article.