A company has started exclusive talks with Leyou Technologies that owns Digital Extremes (the developers of Warframe).

We previously wrote about how Sony Corporation wanted to place a bid on acquiring Leyou. Since then, we heard no news on this front (although Sony did invest 250 million dollars in Epic Games, and Tim Sweeney, Epic’s CEO said it only happened after the Unreal Engine 5 showcase). However, we now have a new potential buyer on the front, and they might take everything in the process.

The Hong Kong-based Leyou announced that Tencent is the only company that can negotiate with them in the next three months regarding a possible acquisition and privatization. Bloomberg says it might rule Sony out of the contest altogether. The timing feels extremely fishy: since July 8, Beijing has a security office in the city-state, and Tencent happens to have ties to the Chinese Communist Party. This move might be a showcase of their power…

Leyou Technologies will have a monthly announcement about the progress of a possible offer or privatization unless Tencent makes a firm intention to either make an offer or to back out of the deal altogether. Daniel Ahmad, Niko Partners’ senior analyst wrote the following statement:

„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 global markets. Leyou would be part of this expansion as it is a domestic company that already owns multiple domestic and overseas game developers including 97 per cent of Digital Extremes (a Canadian video game developer).

Leyou owns several 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. Tencent’s mobile expertise can also help studios under Leyou bring their titles to smartphones.

Warframe (Digital Extremes) is Leyou’s largest title, accounting for $175 million or 80 per cent of revenue generated in 2019, the game is licensed by Changyou in China and is also available on WeGame locally. There is a separate international version of the game on Steam. The title has nearly 60 million registered users globally. Leyou has numerous titles in development, including games based on popular IP such as The Lord of the Rings and Transformers, that can help diversify revenues in the future,” Ahmad said.

This three-month wait has likely put a cage around Leyou, meaning the company might be owned by the Chinese…

Source: Gematsu

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