Tencent will acquire 29% of Funcom

[Deleted User] · September 2019

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Thane · September 2019

bye funcom, you were fun while you lasted

kitarad · September 2019

What don't Tencent own?

Phry · September 2019

There is no coming back from this i guess, R.I.P Funcom.

Po_gg · September 2019

A few years back I'd have raised and eyebrow on this, but after the demise of TSW I honestly couldn't care less... With Ragnar's departure (Chapters, Draugen are Red Thread) my only interest left with Funcom is AoC, and some occasional login to AO. I'm fairly certain this buy-in won't affect neither of those, so yep, just /shrug.

Tencent is probably just after the Dune money, so hypothetically it could be even a bit positive news to the beancounters and other shareholders of Funcom. On the flipside this means their homeland safety net which provided them emergency cash injections in the past is gone, Tencent won't throw money at them unless they can show up something in return.

Only time will tell how this event turns out at the end.

emikz1k · September 2019

probably good for funcom workers

Kyleran · September 2019

kitarad said:

What don't Tencent own?

Technically they don't own Funcom, would need 51% to gain a controlling interest.

Definitely enough shares to push their own agenda of course, probably a seat on the Board as well.

Po_gg · September 2019

Kyleran said:

kitarad said:

What don't Tencent own?

Technically they don't own Funcom, would need 51% to gain a controlling interest.

Definitely enough shares to push their own agenda of course, probably a seat on the Board as well.

I think kitarad's point was that Tencent already has Riot, Grinding Gear, Supercell, partly has Epic, dipped its toes into Acti/Blizz, Ubisoft, etc. (if you just look at games and companies related to the West), so they basically swallow gaming as a whole, step by step...

As for controlling interest, if you look at Funcom the 29ish % is pretty much gives them control. Besides them there are only a few banks with a few % (and they don't care much about the game development directions much), and a bunch of small shareholders.

Funcom was independent so far, since none of those were interested in the gaming, they were "just" investors. This is the first time when Funcom has an almost 1/3 weighted voice coming from a shareholder, which is actually the largest player on the gaming market currently.

Will be interesting to see how it plays out on the long run.

Theocritus · September 2019

This last Conan game didn't do so well? I know Funcom has been in trouble financially since they made TSW.

Kyleran · September 2019

Po_gg said:

Kyleran said:

kitarad said:

What don't Tencent own?

Technically they don't own Funcom, would need 51% to gain a controlling interest.

Definitely enough shares to push their own agenda of course, probably a seat on the Board as well.

I think kitarad's point was that Tencent already has Riot, Grinding Gear, Supercell, partly has Epic, dipped its toes into Acti/Blizz, Ubisoft, etc. (if you just look at games and companies related to the West), so they basically swallow gaming as a whole, step by step...

As for controlling interest, if you look at Funcom the 29ish % is pretty much gives them control. Besides them there are only a few banks with a few % (and they don't care much about the game development directions much), and a bunch of small shareholders.

Funcom was independent so far, since none of those were interested in the gaming, they were "just" investors. This is the first time when Funcom has an almost 1/3 weighted voice coming from a shareholder, which is actually the largest player on the gaming market currently.
Will be interesting to see how it plays out on the long run.

Regardless, Funcom's board can chose to ignore the minority shareholders if they wish, even if they own 49.99 percent of the shares.

Now they probably won't, tends to trigger proxy fights and lawsuits, but they could legally do so if they viewed this move as hostile.

Po_gg · September 2019

I doubt they view it as hostile, on the contrary...

I'm biased though, not much of a fan since the whole TSW -> Legends shenanigans, but as I see Funcom, I'd wager they're having champagne now and a big celebration

Tencent has a lot more money, even if it comes with some risks. Still, the benefits could be better to Funcom. Who knows what plans they have? For example a localised Dune on Tencent's chinese platform could give a lot wider coverage at release...

Azaron_Nightblade · September 2019

Tencent isn't that awful as far as Asian companies go to be honest.

So I'll wait and see where this goes before judging too much, I think.

Celcius · September 2019

This really doesn't mean anything for the games Funcom makes. They won't get worse, but they certainly won't get better....

Kothoses · September 2019

This is not the worst thing that could have happened.

If you look historically at the companies Tencent gets a large holding in, they do tend to try and generate increased revenue and push things, but they rarely (atleast in the Western market, I cant speak for the eastern one) do so in a way that is detrimental to the games them selves.

Look at League of Legends, now say what you will about the community and the issues within Riot, but the monetisation of league did change when Tencent took over (anyone remember the cheap IP champions slowly going away and being replaced by the much more expensive ones, which in turn as a system was replaced entirely by the shard system).

Those were almost immediate changes that then morphed into lock box / battle passes, as is the standard these days.

Grinding Gear Games, it is hard to argue against the model that GGG has employed, although for my tastes it does lean into it very heavily, but you can play a very good game for free, and you will end up spending money because you want to. The problem is the costs are actually again quite high for what you get (unless you "game the system" but thats a nice bit of psychological marketing that I wont go too far into here). But they again did not introduce any red flag transactions.

At the point Tencent bought into Acti Blizz, blizz introduced their cash shop, but again, nothing that goes on there is really red flag raising.

All of those games when TenCent got involved were invested in, and gained a lot more resources, they also went on to be successful.

Tencent generally does not make bad investments, and they are far far better as a part owner than a lot of the alternatives Funcom could have gone to.

For me Funcoms problem has always been the fact they dont wind down project support, they literally go from "all guns blazing, to Panic, to maintenance mode".

Both AoC and TSW could have maintained a decent profitable player base with small investments, but in both cases (Expansion for AOC, Legends for TSW) Funcom pulled the panic button, and when that did not work out, just went radio silent and quietly let the games slip into maintenance mode.

One only hopes that the tencent investment pushes them back to those games a bit.

Iselin · September 2019

They're like gremlins... they're everywhere!

One thing I'll say for them is that they are much less intrusive than EA. EA acquires studios and tries to change them to fit their idea of how it should be done while Tencent is much more hands-off and lets most studios they fully or partially control keep on doing whatever they were doing that interested them in the first place.

Panther2103 · September 2019

Kothoses said:

This is not the worst thing that could have happened.

If you look historically at the companies Tencent gets a large holding in, they do tend to try and generate increased revenue and push things, but they rarely (atleast in the Western market, I cant speak for the eastern one) do so in a way that is detrimental to the games them selves.

Look at League of Legends, now say what you will about the community and the issues within Riot, but the monetisation of league did change when Tencent took over (anyone remember the cheap IP champions slowly going away and being replaced by the much more expensive ones, which in turn as a system was replaced entirely by the shard system).

Those were almost immediate changes that then morphed into lock box / battle passes, as is the standard these days.

Grinding Gear Games, it is hard to argue against the model that GGG has employed, although for my tastes it does lean into it very heavily, but you can play a very good game for free, and you will end up spending money because you want to. The problem is the costs are actually again quite high for what you get (unless you "game the system" but thats a nice bit of psychological marketing that I wont go too far into here). But they again did not introduce any red flag transactions.

At the point Tencent bought into Acti Blizz, blizz introduced their cash shop, but again, nothing that goes on there is really red flag raising.

All of those games when TenCent got involved were invested in, and gained a lot more resources, they also went on to be successful.

Tencent generally does not make bad investments, and they are far far better as a part owner than a lot of the alternatives Funcom could have gone to.

For me Funcoms problem has always been the fact they dont wind down project support, they literally go from "all guns blazing, to Panic, to maintenance mode".

Both AoC and TSW could have maintained a decent profitable player base with small investments, but in both cases (Expansion for AOC, Legends for TSW) Funcom pulled the panic button, and when that did not work out, just went radio silent and quietly let the games slip into maintenance mode.

One only hopes that the tencent investment pushes them back to those games a bit.

This is what I was thinking. They don't tend to force companies into game breaking monetization. They tend to stay back and make slight changes if they aren't making enough revenue, and honestly I can't tell if it's Tencents influence on this or if it's the companies making the decisions on it themselves. I can't see Funcom really changing much from this.

Kyleran · September 2019

Torval said:

Kyleran said:

Po_gg said:

Kyleran said:

kitarad said:

What don't Tencent own?

Technically they don't own Funcom, would need 51% to gain a controlling interest.

Definitely enough shares to push their own agenda of course, probably a seat on the Board as well.

I think kitarad's point was that Tencent already has Riot, Grinding Gear, Supercell, partly has Epic, dipped its toes into Acti/Blizz, Ubisoft, etc. (if you just look at games and companies related to the West), so they basically swallow gaming as a whole, step by step...

As for controlling interest, if you look at Funcom the 29ish % is pretty much gives them control. Besides them there are only a few banks with a few % (and they don't care much about the game development directions much), and a bunch of small shareholders.

Funcom was independent so far, since none of those were interested in the gaming, they were "just" investors. This is the first time when Funcom has an almost 1/3 weighted voice coming from a shareholder, which is actually the largest player on the gaming market currently.
Will be interesting to see how it plays out on the long run.

Regardless, Funcom's board can chose to ignore the minority shareholders if they wish, even if they own 49.99 percent of the shares.

Now they probably won't, tends to trigger proxy fights and lawsuits, but they could legally do so if they viewed this move as hostile.

Well, the headline says they'll become the largest shareholder so it would take several shareholders to stand against them and even then that could be ruinous. A company doesn't have to hold > 50% stock to "own" and run a company. They just need enough to have a big vote and people afraid to vote against them.

My guess is that Tencent is bringing desperately needed funds and that no one will oppose their suggestions to improve. TC bought as much as necessary to ensure that. Additionally, TC is successful and FC is struggling. They'll gladly follow the money wherever TC leads them.

Perhaps, but this stock purchase is for existing Funcom shares, so not a cash infusion for the company.

Going forward they may lend Funcom funds or pay for help develop mobile games.

Can't see them "investing" cash directly without control of the Board.

Quizzical · September 2019

It only costs $0.10 to buy 29% of Funcom? They must be in more trouble than I thought. </sarcasm>

Hariken · September 2019

I just want someone to take Anarchy Online away from Funcom.

DrunkWolf · September 2019

maybe we can get Vanilla age of conan servers but this time with Drunken Bar Room Brawling !

Theocritus · October 2019

Hariken said:

I just want someone to take Anarchy Online away from Funcom.

Too bad we never got a AO2....The first game was amazing but poor graphics.

AlBQuirky · October 2019

In a story follow-up, Fiddy Cent buys 30% in Funcom

I'll see myself out...

anemo · October 2019

Kyleran said:

kitarad said:

What don't Tencent own?

Technically they don't own Funcom, would need 51% to gain a controlling interest.

Definitely enough shares to push their own agenda of course, probably a seat on the Board as well.

For publicly traded companies 12% is normally enough to push whatever agenda you want on the company. Essentially with a combination of most share holders no showing votes, that they're always be some that vote with you, and the logic that following the largest shareholder makes sense because they have the most to gain from success.

And Funcom is publicly traded.

vegetableoil · October 2019

anemo said:

Kyleran said:

kitarad said:

What don't Tencent own?

Technically they don't own Funcom, would need 51% to gain a controlling interest.

Definitely enough shares to push their own agenda of course, probably a seat on the Board as well.

For publicly traded companies 12% is normally enough to push whatever agenda you want on the company. Essentially with a combination of most share holders no showing votes, that they're always be some that vote with you, and the logic that following the largest shareholder makes sense because they have the most to gain from success.

And Funcom is publicly traded.

Yes you are absolutely right, publicly traded company don't need 51% controlling interest (if you watch too much movie you will think 51%), most of the share holder won't even care what the company is doing. Good company will have annual shareholder meeting, but sometimes they announce it in local newspaper (which you might get the news), and being the shareholder is all around the world they might not have time to come to the meeting especially if you own .03% of the shares. A very good publicly traded company might sent you letter for voting decision like board of directors, but it usually a multiple choice of people who is appointed by the largest share holder. You could band together with other smaller shareholder to appoint a person to the board of directors, but it takes time and a very tedious process. so yeah 29% purchase at funcom, tencent pretty much dictates whatever is going on inside the company since now they have total of 36% of the company, I doubt the ceo even own 10%.

Scorchien · October 2019

I Invested in FCMKF , I bought a lot if it @ .05 a share, in 2016.. Really good news ...

gervaise1 · October 2019

Torval said:

Kyleran said:

Po_gg said:

Kyleran said:

kitarad said:

What don't Tencent own?

Technically they don't own Funcom, would need 51% to gain a controlling interest.

Definitely enough shares to push their own agenda of course, probably a seat on the Board as well.

I think kitarad's point was that Tencent already has Riot, Grinding Gear, Supercell, partly has Epic, dipped its toes into Acti/Blizz, Ubisoft, etc. (if you just look at games and companies related to the West), so they basically swallow gaming as a whole, step by step...

As for controlling interest, if you look at Funcom the 29ish % is pretty much gives them control. Besides them there are only a few banks with a few % (and they don't care much about the game development directions much), and a bunch of small shareholders.

Funcom was independent so far, since none of those were interested in the gaming, they were "just" investors. This is the first time when Funcom has an almost 1/3 weighted voice coming from a shareholder, which is actually the largest player on the gaming market currently.
Will be interesting to see how it plays out on the long run.

Regardless, Funcom's board can chose to ignore the minority shareholders if they wish, even if they own 49.99 percent of the shares.

Now they probably won't, tends to trigger proxy fights and lawsuits, but they could legally do so if they viewed this move as hostile.

Well, the headline says they'll become the largest shareholder so it would take several shareholders to stand against them and even then that could be ruinous. A company doesn't have to hold > 50% stock to "own" and run a company. They just need enough to have a big vote and people afraid to vote against them.

My guess is that Tencent is bringing desperately needed funds and that no one will oppose their suggestions to improve. TC bought as much as necessary to ensure that. Additionally, TC is successful and FC is struggling. They'll gladly follow the money wherever TC leads them.

Funds? Not sure. I doubt they would simply "invest" in Funcom for no return. This should underpin the company / shareprice though helping Funcom to raise funds.

As "much as necessary"? The % could be the maximum allowed without triggering a full takeover bid - would have to check Finland's takeover laws etc. but 30% is often a key threshold.

The board ignoring their suggestions? Agree not likely - they have experience after all. A lot of institutional shareholders vote with a board by default though and so if he board wanted to they probably could at least initially.

As for Tencent "getting involved" - Epic have said they don't; Riot Games have said in interviews they don't; no suggestion that they got involved in Activision Blizzard despite having a 25% stake at the time they demerged from Vivendi (think its c. 5% now) so if that pattern is repeated Funcom will carry on "bumping along".

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Tencent will acquire 29% of Funcom

거북이는 목을 내밀 때 안 움직입니다

Comments

Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV

Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV

Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV