Tencent could make multibillion-dollar effort to acquire Take-Two Interactive or EA
Tencent Holdings (OTC: TCEHY) is one of the world’s largest entertainment and media companies, and the Chinese tech giant is in the midst of a multi-year campaign to buy out video game companies. A recent report from news site TMT Finance suggests that Tencent may have an eye on some of the biggest US game publishers, namely Electronic arts (NASDAQ: EA) and Take-Two Interactive (NASDAQ: TTWO).
EA and Take-Two are titans of the US gaming industry, with market caps of around $ 43 billion and $ 24 billion, respectively. A move by Tencent to acquire either publisher would be a development that would change the industry.
It’s still unclear whether Tencent will make a serious effort to buy EA or Take-Two. Some sources in the TMT Finance report suggest that major South Korean developers, including Net marble and Nexon may be more likely acquisition targets in the near future. Either way, Tencent will almost certainly continue to make big purchases in the game industry.
Video games have levels of engagement that surpass almost any other entertainment medium, and some game companies may see growth opportunities extend beyond their current core businesses. Take the semiconductor company NVIDIA, for example. The shift from specializing in graphics processing units for high-end gaming experiences to providing hardware for databases, artificial intelligence and machine vision has redefined the business and generated incredible inventory gains. .
In addition to thriving core businesses that have great room for growth, major game companies may be able to tap trends such as artificial intelligence, augmented reality, and e-commerce. The future of games and interactive media remains very bright, and Tencent’s investment in these categories could have huge long-term benefits.
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