Chinese streaming platform Bilibili has invested HK$960 million ($123 million) in the X.D. Network, the company behind the famous Chinese game TapTap. [Bilibili HK960M X.D. Network Chinese Taptap]
Key Takes:
- Bilibili has invested HK$960 million in X.D. Network, the Chinese company behind the TapTap game
- Bilibili now owns a 4.72% stake in X.D. Network, making it one of the biggest gaming deals in China
- Bilibili is trying to diversify its sources of income beyond just selling mobile games and find new ways to make money
- Tencent did not invest in X.D., likely due to its rivalry with ByteDance
- ByteDance has formed a large gaming team of 3,000 people and acquired Moonton to expand its influence in the gaming industry and challenge Tencent’s dominance
- ByteDance’s Douyin is competing with Tencent’s WeChat app for users’ attention
In recent times, the Chinese tech industry is becoming more competitive day by day. The recent surge in gaming has the tech giants ready to invest as soon as they sniff a potentially big gaming company.
Such an investment was made into X.D. Network, the company behind the famous Chinese game TapTap. The famous video streaming platform for the youth in China, Bilibili, made an investment of $123 million, making it one of the biggest gaming deals in China.
The latest investment will provide Bilibili with a 4.72% stake in X.D. Network. The valuation was made through the market share price of HK$42.38 a piece, Bilibili bought 22,660,000 shares of the X.D. Network.; The stock was listed in New York as well as Hong Kong. Now that the partnership is official, there are more collaborations to come in the future.
Gaming and entertainment aren’t something new for Bilibili. The video content service for Chinese Gen-Z earns most of its money from mobile games. According to Bilibili, 40% of the company’s revenue in 2020 was from gaming alone.
However, this percentage has decreased over time. In 2018 and 2019, mobile games accounted for 71% and 53% of Bilibili’s revenues respectively. This means that the company is trying to diversify its sources of income beyond just selling mobile games.
In other words, Bilibili is trying to find new ways to make money that don’t rely solely on selling mobile games. This could include selling other products or services or finding new revenue streams in other areas. [Bilibili HK960M X.D. Network Chinese Taptap]
Tencent and WeChat Follow the same Path
Just like Bilibili, other Chinese tech giants namely WeChat and Tencent are doing something similar. Instead of relying on their traditional services, they are diversifying their investment portfolios. However, X.D. Network uses a different approach to make money. Instead of charging high commissions, they generate revenue via ads.Â
X.D. has managed to lure in several gaming companies, including Lilith Games, miHoYo, Alibaba, and ByteDance, thanks to its compelling proposition. ByteDance has shown a strong commitment to the gaming industry by forming a large team of 3,000 people within just six years. With the recent investment from Bilibili, X.D.’s group of high-profile gaming investors has become even stronger.
On the contrary, it is worth noting that Tencent did not invest in X.D. This is likely due to the intense rivalry between Tencent and ByteDance.Â
Recently, ByteDance outbid Tencent to acquire Moonton, a popular gaming studio in Southeast Asia. ByteDance’s acquisition of Moonton is seen as a strategic move to expand its influence in the gaming industry and challenge Tencent’s dominance.
In other news, ByteDance’s Chinese version of TikTok, called Douyin, is competing with Tencent’s WeChat app for users’ attention. [Bilibili HK960M X.D. Network Chinese Taptap]
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