Tencent Becomes Largest Shareholder of Japanese Game Company Marvelous Inc

Tencent will acquire a 20% stake in Japanese game developer and publisher Marvelous, which is best known for its farming simulation game Story of Seasons, making the Chinese gaming behemoth the largest shareholder of the company, according to a report from GameLook.

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Tencent will spend around 7 billion yen ($65 million) through an affiliate named Image Frame Investment on purchasing existing shares and new shares from the Japanese game maker. The transaction will take place in June, a report from Nikkei Asian Review said.

Marvelous said it would use the investment to expand its existing game franchises and launch new titles in the next three years. One of the company’s most recent releases was third-person mech shooter game Daemon X Machina. Marvelous is also preparing for the launch of Story of Seasons: Friends of Mineral Town—a remake of a wildly popular title published in 2003 that will be available on Nintendo Switch in July.

In addition to the Story of Seasons franchise, Marvelous’ other games such as those in the Rune Factory series and Senran Kagura have also been highly successful in both the Japanese and overseas markets. However, the company has seen sharp drops in profit in its gaming business in the fiscal year ending March 31, with profits from its online game segment plummeting 78% and profits from its consumer game business declining 28.8% compared to the previous fiscal year.

“In comparison to Western companies, there is a widening abyss in terms of development capability and financial clout,” Marvelous said in a statement to Reuters.

The partnership between Tencent and Marvelous goes back to 2019, when the Japanese gaming company gave Tencent the right to use the intellectual property of Story of Seasons to make a mobile title. The title is still currently under development, according to the GameLook report.

Before buying the stock of Marvelous, Tencent also in January invested in Japanese developer Platinum Games, a company known for action titles such as Nier: Automata and Bayonetta. Platinum Games president and CEO Kenichi Sato said the partnership with Tencent does not affect the developer’s independence.

In addition to being the parent company of League of Legends creator Riot Games and Finnish developer Supercell, Tencent also owns shares of many major gaming companies around the world, including 40% of Fortnite developer Epic Games, 5% of Activision, as well as 11.5% of PlayerUnkown’s Battlegrounds owner Bluehole.