Girls promote games by Shanghai Giant Network Technology Co at an industry expo held in Beijing. PROVIDED TO CHINA DAILY
A consortium of Chinese companies led by game developer Shanghai Giant Network Technology Co will buy Israeli casino-style online gaming developer Playtika Ltd from Caesars Entertainment Corp for .4 billion, the companies announced during the weekend.
Analysts said it was a bid by the investors to gain a firmer foothold in the mobile gaming market.
"Acquiring Playtika would help the company diversify its portfolio by adding social casino games and get a more global customer base under its belt, providing an additional subcategory specialization that they didn't have before and can now use to target new markets," said Bin Dai, region director of Greater China at App Annie, a US-based analytics firm.
The consortium involved in the all-cash deal comprises 11 investors.
They include Alibaba Group Holding Ltd Chairman Jack Ma's private equity company Yunfeng Capital, China Oceanwide Holdings Group Co, China Minsheng Trust Co and Hony Capital Fund, the companies said.
They added that Playtika will continue to operate independently, with its headquarters in Israel.
"We are incredibly excited by the commercial opportunities the consortium will make available to us, particularly in its ability to provide us access to large and rapidly growing emerging markets," said Robert Antokol, co-founder and CEO of Playtika.
Founded in 2010, Playtika was the first to introduce free-to-play casino-style games to social networks, according to its official website portfolio, which differentiates it from traditional online gambling games. Shanghai Giant Network Technology said in its statement that Playtika's virtual currency could not be exchanged for real money.
He Jie, an analyst at Beijing-based internet large data products and service provider Analysys, said with an average growth rate between 50 percent to 55 percent, Playtika was an absolute leader in the market share of North American social chess and card games.
From the second half of 2015, Shi Yuzhu, founder and chairman of the Giant Network Technology, carried out a bold reform on his company's gaming business, of which a key direction is the transition to mobile play.
Previously, Giant Network Technology was also involved in a bid for Supercell, the Finnish maker of "Clash of Clans", which ultimately failed. In June, Tencent Holdings Ltd announced that a consortium led by Tencent would pay .6 billion for Supercell and buy 84.3 percent stake in it, which broke the record for an acquisition price in gaming industry.
Market research agency Newzoo assumes that the mobile game segment in China will reach billion in revenue this year, up 41 percent from .1 billion 2015.
It predicts China will remain the biggest games market in the future, hitting .9 billion in sales by 2019.