There’s been an odd trend among game developer acquisitions over the past couple of years. Chinese industrial firms — with no link to gaming — have been buying up Western developers, either directly or through shell corporations. We’ve seen it with Jagex, Bigpoint, and Red 5, while SuperData predicted the trend would accelerate, with Chinese companies picking up “1-2 Western publishers a month.”
If you’re at all interested in the financial nuts and bolts behind this series of acquisitions, Bloomberg recently posted an article that tries to explain the phenomenon. The author paints it as being the result of a slowdown in those core Chinese industries and companies looking for profit any way they can, setting up some fairly elaborate systems to facilitate things while trying to adhere to Chinese law.
I won’t confess to understanding it all, though it does sound equal parts “solid investment” and “shady business.” The first comment on the Gamasutra article that summarizes Bloomberg’s reporting paints a grimmer picture of affairs. It states that the Chinese companies are forming a “powerful speculative bubble” and that when it bursts, the companies involved — as well as a lot of other people — “could be adversely affected by a correction in the Chinese economy.”
In the meantime, at least, everything seems to be going well. Phil Mansell, acting CEO of Jagex, says that its Chinese owner hasn’t interfered with its work in any way, saying “They weren’t looking to drain the company. They weren’t looking to take it apart. They were looking to build upon what we already had.” And everyone, Western and Chinese alike, is profiting from the acquisitions. What could possibly go wrong?