Sector looks abroad after years of rapid domestic growth: experts
A consortium of Chinese companies led by Shanghai-based game developer Giant Network Technology Co announced Sunday it will buy U.S.-based Caesars Interactive Entertainment Inc's online games unit for .4 billion in cash, said media reports.
The deal shows that the gaming sector is pursuing internationalization after several years of rapid domestic growth, experts noted Sunday.
The consortium also includes Yunfeng Capital, a private equity firm established by Alibaba Group Holding founder Ja ck Ma Yun, China Oceanwide Holdings Group Co, China Minsheng Trust Co, CDH China HF Holdings Co and Hony Capital Fund, domestic news portal sohu.com reported Sunday.
None of those companies could be reached for comment as of press time.
"The deal is also one of the key diversification moves by Internet titan Alibaba, which is committed to -e-commerce, as it seeks to enter the gaming sector," said Li Chengdong, Beijing-based independent e-commerce strategy analyst.
Li told the Global Times on Sunday that as the entertainment and gaming sectors offer the prospect of continuous growth, they will be key targets for investment.
After the deal, Caesars' online games business, known as Playtika, will continue to run independently with its own management team. Its headquarters will remain in Israel, said the report.
The deal, subject to regulatory approvals, is expected to be completed in the third or fourth quarter of 2016.
Founded in 2010 in Israel as a 10-person start-up, Playtika has grown into a leading social casino game business with more than 1,300 employees worldwide. It was acquired by Caesars in 2011.
Playtika makes games including Bingo Blitz, Slotomania and House of Fun, showed -information on the company's website.
"Playtika has achieved great growth in recent years thanks to its outstanding team, advanced corporate culture, cutting-edge big data analytics and its technology to transform games," Giant's founder and Chairman Shi Yuzhu was quoted as saying by sohu.com.
"We are looking forward to see Playtika continue to innovate and achieve a good performance," Shi noted.
"The deal will bring a large business opportunity to Playtika and will offer the company access to large and fast-growing emerging markets," noted Robert Antokol, cofounder and CEO of Playtika, according to sohu.com report.
The acquirement will help the domestic game developer Giant become more -competitive. The Shanghai-based company has been trying to transform and upgrade its gaming business, but it has been left behind by other domestic companies such as Tencent Holdings, Liu Dingding, a Beijing-based independent industry expert, told the Global Times on Sunday.
Liu said that at the moment, an increasing number of Chinese companies have the ability to buy foreign companies and help them develop, instead of being acquired by foreign companies as was the case in the past.
"Chinese companies should learn from their global counterparts to make good use of new technology and new services such as cloud computing to excel in the coming years," Liu said.
Caesars, which previously considered the virtual goods social casino game company as a good complement to its real-money gambling properties, announced to sell off the business in order to pay down debt, US tech Web portal venturebeat.com said Sunday.
South Korea's Netmarble was rumored to have bid .3 billion for the company, but other bidders besides Netmarble emerged, according to the report.