Staying on the tech front, Tencent to Acquire Majority Stake in Supercell from SoftBank for U$D 8.6 billion. In total Tencent will own 84% of the company, valuing it at $10.2 billion. Pre-tax profits last year for Supercell were $960 million meaning Tencent paid a low double digit multiple for the company, time will tell if this was a good purchase. The huge risk here is that their current stable of games become old and they don't come up with new games to keep the user numbers and revenues up, currently there are over 100 million people a day who play supercell games.
I don't fully understand the gaming culture and the numbers of people who watch gamers game. If I consider how many people think I am mad watching a full day or two of test cricket I can understand how one persons entertainment is not the same as another. Here is a video watched 3.6 million times of clans playing on iPads battling each other, Clan War Finals: Sweden 1 Star vs. Glory China I, the game has a strong following.
The line in the announcement that stood out to me was:
"In parallel to the transaction, Tencent and Supercell have entered into marketing and publishing arrangements regarding the distribution of games developed by Supercell in China."
This allows Supercell to have access to Tencents distribution network and access to their huge user base. Tencent will get new content to push to their users and increase revenues. Win-win for both companies (and Naspers).