Tencent Eyes Nexon Acquisition to Boost Global Gaming Presence

Tencent, the Chinese technology conglomerate, is reportedly exploring the acquisition of Nexon, a prominent South Korean game developer known for its hit title Dungeon & Fighter and its significant investment in Web 3 gaming, particularly the MapleStory franchise. This potential acquisition comes as Tencent seeks to strengthen its position in the global gaming market, especially in South Korea, a region with a thriving gaming industry.

The discussions are still in the preliminary stages, and there is no certainty that they will culminate in a deal. However, if the acquisition goes through, Tencent would gain control over a company with a market capitalization of $16.6 billion. This move could reignite Tencent's ambitions in global gaming mergers and acquisitions, which had slowed down due to regulatory crackdowns in China in 2020.

The acquisition of Nexon would provide Tencent with long-term control over popular intellectual property and a stronger presence in South Korea's lucrative gaming market. However, the deal is fraught with complexities. The Kim family, which controls a 44.4% stake in Nexon via holding company NXC Corp, inherited control after the founder's death in 2022. The family has since handed over shares to the government to cover inheritance taxes, but the government has been unable to offload its stake.

Tencent's previous attempt to acquire Nexon in 2019 failed due to disagreements over pricing. This new attempt follows Tencent's $1.3 billion investment in a new Ubisoft unit and a 10% stake in a K-pop label. Additionally, Tencent is expanding into the blockchain space, having signed a memorandum of understanding earlier this year to develop a suite of blockchain API services with Ankr.