Another Chinese giant tries to make its way into the gaming industry. Video sharing website Bilibili made a $123 million investment in local distribution platform TapTap owned by X.D. Network.
The company shared the news on April 1. According to TechCrunch, Bilibili will purchase 22.66 million shares of X.D. Network’s common stock, which will give it a 4.72% stake. The deal will help the Chinese giant to strengthen its position in the game market.
Although its video streaming platform remains its main business, Bilibili isn’t new to the video games industry. It published a few titles for the Chinese market, which accounted for 40% of total revenue in 2020. However, the earnings from games fell drastically (compared to 71% ratio in 2018), so the company is now seeking new ways to drive revenues.
X.D. Network also publishes games but platform TapTap is its biggest product. It helps developers release games outside of traditional distribution models and get rid of the high fees charged by other companies, like Xiaomi and Huawei.
“TapTap is disrupting how games are distributed in China with its community-focused platform and 0% take rate fee on IAP,” Niko Partners senior analyst Daniel Ahmad commented. He also said that TapTap’s success helped games like Genshin Impact skip traditional Android distribution channels dominated by Tencent.
Bilibili’s latest move is another example of tough competition in the Chinese video games market. Large companies continue to invest in and buy other studios, trying to diversify their businesses and increase their revenues. For example, ByteDance acquired Moonton, known for its MOBA Mobile Legends, for $4 billion last month.