GamesBeat

Star Trek Online publisher to invest $100M in Chinese MMO publisher Shanda

Above: Robert Xiao, CEO of Perfect World.

Image Credit: Dean Takahashi

Correction: This article previously suggested that Shanda Games is the developer of MapleStory. That is not the case. Nexon is the actual studio that makes that game while Shanda publishes it in China. We apologize for the confusion.

The publisher responsible for games like Star Trek Online is looking to expand its operations by spending some cash in China.

Perfect World, a publisher of massively multiplayer online games, announced that it is setting aside $100 million in cash to purchase 30.3 million shares in Shanda Games (according to Reuters), a rival MMO developer. Shanda is responsible for publishing hugely popular online PC and mobile releases like Aion, MapleStory, and Ragnarok Online in China. While Shanda Games has established its properties on a worldwide scale, it is most successful in China. That nation generated $8.7 billion in spending on client-based PC games (think World of Warcraft and League of Legends) in 2013, and MMOs like MapleStory played a big role in that. Perfect World expects this agreement will go through within a month.

As part of this deal, Perfect World will join with a consortium of other corporations looking to take over ownership of Shanda. In January, the consortium, which includes Shanda Interactive and Primavera Capital Limited, made a deal to acquire Shanda Games for $3.45 per share. That would value the developer at $1.9 billion. The studio has not yet responded to the offer.

The members of the consortium are likely looking to the continued growth of free-to-play games in China as well as the spread of the business model in other countries as a sign that Shanda’s expertise will pay off in the long run.

Perfect World, which takes its name from its Chinese MMO of the same name, saw its revenue grow by 11 percent year-over-year in Q4 of 2013. That comes prior to its launch of Valve’s Dota 2, which the company is overseeing in China. At that time, the publisher’s chief executive officer, Robert Xiao, made it clear that the company was looking for ways to solidify further partnerships, mergers, and acquisitions to continue growing.

In March, the company appointed its former senior vice president of business development as its chief business officer, and Xiao gave him marching orders to make exactly these kinds of deal.

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More information:

Perfect World Co., Ltd. (NASDAQ: PWRD) is a leading online game developer and operator based in China. Perfect World primarily develops online games based on proprietary game engines and game development platforms. Perfect World's st... read more »

Shanda Interactive Entertainment Limited (Nasdaq: SNDA) ("Shanda") is a leading interactive entertainment media company in China, offering a broad array of online entertainment content on an integrated service platform to a large and d... read more »

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