Alibaba enters mobile gaming industry with $145m investment

Chance Chan / Reuters

Chinese tech giant Alibaba is investing RMB1 billion ($145 million) in the mobile gaming industry, as the group continues to expand its reach in the digital realm, it said in a statement.

Alibaba announced the partnership with Mail.Ru Group, TFJoy, Efun and ONEMT to establish the “Global Strategic Alliance of Game Distribution” on March 16.

China is the biggest market for online gaming, and is forecasted to hit a size of $12 billion by 2020, CNBC cited a PricewaterhouseCoopers research.

However, players in this industry in the country are facing the challenges in terms of passing government censors and the restriction of social media use.

The newly established consortium targets to bridge this gap by providing upgraded gaming experience to local users, as well as to bring more offerings between China and other parts of the world, including Russia, Europe, Japan, Middle East and the US.

Alibaba Games will use big data for accurate distribution and precise recommendation system, the Hangzhou-based firm said.

Units under the tech titan, including Alibaba Digital Media & Entertainment Group, UCWeb, Youku, Alibaba Pictures and Alibaba Literature, will integrate resources to maximize the value of game intellectual property, “building a circulation chain for the IP derivatives,” said Xiaopeng HE, president of Alibaba Mobile Business Group.

He added UCWeb, with its massive traffic entry globally, will play a significant role in the distribution of Alibaba Games.

“The development in mobile games market in the five biggest international market – Europe and the US, Japan and South Korea, the Middle East, Latin America and Southeast Asia, is uneven. European, American, Japanese and South Korean markets are already considered mature markets, while the Middle East in the past two years is seeing rapid development, and Latin America and Southeast Asia as the emerging markets show very high potential in the mobile games consumption. We are doing very well in emerging markets like India and Indonesia already,” said Simon Shi, president of Alibaba Games.

It is a showcase for Alibaba’s strategy of going beyond e-commerce and payment, even after the firm has expanded to movie and entertainment.

Entering the gaming sector, Alibaba Games will compete directly with NetEase and Tencent, the two largest players which altogether take up a 60 per cent market share.

Also read:

Alibaba to launch regional distribution hub in Malaysia

India: Battle lines drawn, Alibaba to invest $177m more in Paytm to take on Amazon

Alibaba Group expands presence in Australia, New Zealand

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.