Chinese mobile Internet firm buys game maker for $80M
Beijing-based mobile Internet company KongZhong said today it is buying Shanghai Dacheng Network for $80 million.
Shanghai Dacheng Network is a developer of 3-D massively multiplayer online (MMO) games where thousands of people play together in online virtual worlds. The transaction shows that online gaming, on its way to $3.8 billion in revenues in China, remains a hot market.
The aim is to combine KongZhong’s mobile game business with Dacheng’s 3-D game engine and development skills to create a multi-platform digital entertainment and gaming company, focused on both PC MMOs and mobile games.
The deal is expected to close in the first quarter, and payment will be spread out over time, with the total paid contingent on performance. The financing includes a mix of cash and stock. Dacheng’s newest game is Loong, which just enjoyed a strong launch. KongZhong’s chairman and chief executive, Leilei Wang, holds a 24.8 percent stake in Dacheng but has never held a management position at the company. Still, KongZhong said Wang recused himself from the acquisition deal and the transaction was approved by KongZhong’s audit committee. Wang will not receive any cash under the deal and will receive only shares.
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About the Author, Dean Takahashi
Dean is lead writer for GamesBeat at VentureBeat. He covers video games, security, chips and a variety of other subjects. Dean previously worked at the San Jose Mercury News, the Wall Street Journal, the Red Herring, the Los Angeles Times, the Orange County Register and the Dallas Times Herald. He is the author of two books, Opening the Xbox and the Xbox 360 Uncloaked. Follow him on Twitter at @deantak, and follow VentureBeat on Twitter at @venturebeat.
