CEO Kenichi Sato said the funding from Tencent will allow Platinum Games to expand into self-publishing its titles.

Chinese media conglomerate Tencent Holdings (OTC Pink:TCHEY,HKEX:0700) is advancing its position in the gaming category once again with a new capital investment.

On Tuesday (January 7), Kenichi Sato, CEO of Platinum Games, shared a statement confirming funding from Tencent, saying it will allow the studio to expand from purely game development into self-publishing its titles and strengthening its operational foundation.

In the release, Sato said the partnership will not affect the independence of the company, and that Platinum Games will maintain its operations under the current corporate structure.

“We also hope that this partnership can give us a wider global perspective, while still creating high quality games that stay true to our name,” Sato added. The amount of the investment was not disclosed, and Tencent and Platinum Games did not respond to the Investing News Network’s request for comment.

Tencent’s share price saw a slight increase of 1.8 percent from market close on Monday (January 6) to early during the trading session on Tuesday. It sat at US$49.65 as of 1:20 p.m. EST on Tuesday.

Platinum, an Osaka-based game developer, is the mind behind popular titles including NieR: Automata and the Bayonetta series.

In an interview with Video Games Chronicle last year, Atsushi Inaba, studio head at Platinum Games, said the firm was focused on moving away from external funding and toward a self-publishing model that would give it more control over its intellectual property (IP).

“For us as creators, we want to get to the point where self-publishing allows us to own our IP and do what we want with it, including making sequels. So the faster we can have that freedom, the better it will be for all the creators here,” he said.

Inaba added that a self-published title is already in the works at Platinum.

This investment follows several others in the gaming sector on Tencent’s part. The media company owns stakes in a variety of gaming giants like Activision Blizzard (NASDAQ:ATVI), Ubisoft (EPA:UBI) and Glu Mobile (NASDAQ:GLUU), and is the sole owner of other firms like Miniclip and Grinding Gear Games.

In its results for Q3 2019, Tencent reported revenues of US$13.7 million, a 21 percent increase year-over-year. Operating profits were also up 27 percent year-over-year to US$4 million.

Another of Tencent’s recent moves into the gaming sector is a distribution deal with Nintendo (OTC Pink:NTDOF,TSE:7974). In December, the two companies announced that Tencent would operate as the authorized distributor of the Nintendo Switch gaming handheld system in China.

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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.


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