Tencent Is in Exclusive Talks to Acquire Gears Tactics and Warframe Parent Company, Leyou

A week after Bloomberg reported that Sony is considering a bid for Leyou Technologies, Chinese giant Tencent has announced that it is now in “exclusive” talks to acquire the company.

Leyou, the parent company of Splash Damage (Brink, Gears of War series) and Digital Extremes (Warframe), had previously been in talks with Tencent-backed iDreamSky Technology. According to last week’s reports, Sony had hired a financial advisor to edge out competition but Tencent has claimed the lead.

This means that Leyou will exclusively negotiate with Tencent for the next three months following which the latter will decide if it wants to proceed with an offer or not.

“Tencent continues its global expansion efforts with acquisitions of studios that augment the company’s exposure in PC, mobile, and console development for China and for global markets,” Niko Partners’ Daniel Ahmad told GamesBeat. “Leyou owns a number of studios that have expertise in global online free-to-play game development for console and PC, an area that Tencent is actively exploring as it expands overseas.”

80 percent of Leyou’s revenue comes from Warframe, which amounts to $175 million. It has 60 million registered players and has a sizable base on the PlayStation 4. The free-to-play shooter is available on Tencent’s WeGame in China. Warframe is also set to release on next-gen consoles.

“Leyou has numerous titles in development, including games based on popular IP such as Lord of the Rings and Transformers,” Ahmad continued. “That can help diversify revenues in the future.”

Leyou will make monthly announcements to share the progress of negotiations until a final decision is made.

[Source: Venture Beat]