Kim Kardashian Game Maker Among Tencents Losing Investments

The game based on the reality TV starrings life merely cant keep up.

App developer Glu Mobile Inc ., which created the Kim Kardashian: Hollywood role-playing mobile game in 2014, has fallen most out of 11 known listed investments tabulated by Bloomberg. Its share price has fallen nearly 60 percentage since Tencent Holding Ltd.s $ 126 million investment 16 months ago and 3.7 percentage year-to-date.

Six of the 11 companies surveyed have fallen since Tencents investments from between 2011 and June this year. Tencent has at least a five percent stake in each of them. Chinas largest Internet company has been investing aggressively in add-ons from maps to mobile games to complement its WeChat and QQ social network services. Its strategy seems to be paying off for now — earlier this month, its second-quarter sales and net income beat analysts calculates, and the shares rose to a new record.

Its quite obvious that Tencent is trying to build an ecosystem for their digital service, to become a one-stop store said Sandy Shen, a Gartner Inc. research director. Theyve invested in maps and navigation companies, gaming, media content, user reviews, guides. They are trying to be present in every aspect of life a consumer would need services for.

On average, companies in the software and gaming sectors have risen since investment. Chinese software maker Kingsoft Corp Ltd. has risen 210 percent since Tencents $115 million investment in July 2011. Game publishers Activision Blizzard Inc. and Paradox Interactive AB have risen 135 percentage and 83 percentage since July 2013 and May this year respectively.

Tencents mobile gaming revenue doubled to 9.6 billion yuan in its second-quarter; this outpaced a 52 percent rise in overall revenue to 35.7 billion yuan, and stimulates the company one of the biggest gaming providers in the world. Its gaming investments can benefit from leveraging its huge user base and utilizing its electronic pay system, Shen said, referring to WeChat Pay.

Tencents e-commerce investments, which include JD.com Inc ., Leju Holding Ltd. and 58. com Inc ., have on average dropped in the past few years. Leju and 58. com have dropped about 56 percent and 16 percentage since March and June 2014 respectively. JD.com remains the bright spot in e-commerce; it has risen about 36 percent since Tencents $214.7 million buy of 15 percentage stake in March 2014.

There are usually multiple factors affecting share costs, Bloomberg Intelligence analyst Michelle Ma tells in a phone interview. From Tencents perspective, theyre go looking for ownership and long-term strategic considers; they may not mind the fluctuation of the share performance.

Tencent held minority stakes of between 5-23 percent in each of the 11 companies surveyed, including 5.023 percentage in Activision Blizzard as of June 13, 21.5 percent in Glu Mobile as of February 23 and raised its stake in JD.com to 21.25 percentage in JD.com this month.

They prefer minority investments as they choose to let the management of the investees run the company instead of trying to integrate them, Jialong Shi, an analyst at Nomura said in an e-mail. They are quite flexible in terms of the stake to be acquired.

The company, which is Asias largest Internet company by market value, also announced it will result an $8.6 billion acquisition of game maker Supercell Oy in June this year.

Read more: www.bloomberg.com

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