Tencent in talks to buy majority stake in Supercell

Tencent Wants a Piece of Mobile Gaming Looks to Supercell

The talks remain in early stages, but it is clear that Tencent is very interested in the company behind Clash of Clans, Boom Beach and Clash Royale.

Assuming Supercell gives the thumbs up to the Tencent deal, it is likely that the Chinese company will have to shell out about $5.5 billion to be able to buy out SoftBank completely out of the Finnish game development company.

A merger of the two companies could possibly create a dominant game publishing forum.

It is not the first time that Chinese companies have circled around Supercell. Last year, Alibaba along with Giant Interactive Group, started talks over a possible acquisition of the company.

According to sources, however, the final approval for the deal has to go through Supercell themselves, and they may not want to go through with it. Its games could be downloaded for free, but it could earn revenue from selling virtual goods to its players. Tencent has been a leader in PC games – thanks to its unit Riot Games. It acquired Glu Mobile and Pocket Gems previous year to build up its mobile gaming divisions.

As far as the game is concerned, Supercell has been cracking down on cheaters on “Clash of Clans” since last month because it is no longer happy with their unfair playing schemes, much to the detriment of the other players who are playing the game fairly.

Acquiring Supercell will ensure a lucrative entry point into the mobile games space.

Finnish-based Supercell, best known for mobile game and global hit Clash of Clans, previous year made in $2.3 billion revenue thanks to popularity of its free-to-play titles that sell virtual items within the game.

A sale could value the whole of Supercell at more than $5 billion, one of the people said.

SoftBank bought a 51 percent stake in Supercell for United States dollars 1.53 billion in 2013. It raised stake in the company to 73%, but did not reveal the amount paid to increase its stake.

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