Tencent-backed China firm, Russia's Mail.ru to tie up for gaming growth-sources

iDreamSky Technology Holdings

31/07/2019 11:37

By Pei Li and Nadezhda Tsydenova
    BEIJING/MOSCOW, July 31 (Reuters) - Tencent-backed Chinese
video game publisher iDreamSky Technology Holdings  1119.HK  and
Russian tech firm Mail.ru Group  MAILRq.L  are forming an
alliance, in a move that will help Mail.ru expand its gaming
footprint in China, two sources said.
    The partnership will see the two companies collaborate to
publish games and make investments in Asian and European
markets, the sources, who declined to be named as the agreement
had not been yet made public, told Reuters. 
    The collaboration is set to be announced on the eve of the
China Digital Entertainment Expo and Conference, also known as
ChinaJoy, which takes place in Shanghai between Aug 2-5, the
sources said.
    What form the collaboration will take or how much the two
partners will invest in it were not known.
    The deal shows Chinese gaming companies are stepping up
their hunt for new titles to bring into China - one of the
world's biggest gaming markets - after an almost year-long game
license approval freeze that nearly crippled the industry. They
are also expanding overseas to offset stricter government
regulation and slowing economic growth at home.
    Mail.ru and iDreamSky declined to comment on Wednesday. 
    iDreamSky, which is backed by China's largest gaming and
social media firm Tencent  0700.HK , is known for licensing a
raft of hit foreign games, including Angry Birds, Fruit Ninja
and Temple Run in China.
    When it listed in Hong Kong last year, iDreamSky said in its
prospectus that international expansion was part of its plans.  
    Mail.ru, which launched its global gaming brand MY.GAMES in
May, wants to use the partnership to strengthen its position in
China and expand in Asia, one of the sources said.
    The source added that the Russian internet firm will help
iDreamSky publish its games in Russia and Europe, for example by
translating them into local languages.
    MY.GAMES is the biggest launch for Mail.ru Group since the
company started in 2009. Its games division took in more than
$118 million in revenue in the company's second financial
quarter, accounting for roughly a third of Mail.ru's proceeds. 
    About 70% of the games division's revenue comes from
international markets such as the United States, Germany and
Japan and Mail.ru has said that its goal is to increase that to
more than 80%.

 (Reporting by Pei Li in Beijing and Nadezhda Tsydenova in
Moscow; Additional reporting by Anna Rzhevkina in Moscow;
Editing by Brenda Goh and Muralikumar Anantharaman)
 ((Pei.Li@thomsonreuters.com; +86 18810385187;))