My inbox this morning had half a dozen tips and press releases on this Funcom story, so you know we’re doing it first thing: Yes, Tencent is attempting to buy up the rest of Norway-based MMO studio Funcom.
Readers will recall that Chinese gaming giant Tencent purchased 29% of the Oslo company’s shares back in September of last year, making it the company’s largest single investor and snagging it a spot on the board. Now, Tencent has offered to buy up the rest from the shareholders controlling the other 71% of the company’s shares, at a price higher than those stocks’ actual value. That process will begin in February.
There seems to be little reason to panic about the games themselves, or at least more than you already do, as Funcom reassured players on Twitter and in multiple pressers. “Following the intended acquisition, there are no planned changes to Funcom management, staffing, or structure, with the company set to remain an independent business,” the studio writes. “Funcom will also continue to support its long-running online games Conan Exiles, Secret World Legends, Age of Conan, and Anarchy Online. Casais points out that Tencent has a reputation for being a responsible long-term investor, renowned for operational capabilities in online games. Having had Tencent as a majority shareholder since October 2019, has only reaffirmed that notion.”
Curiously, Funcom’s existing management board has taken this moment to “give an update on several matters that have been discussed with the Company’s Executive Management and other key stake holders in the Company” in order to properly inform the existing shareholders as well as Tencent – apparently, the recent buy-ups have delayed some release and focus decisions within the studio. Essentially, the board wants Funcom to postpone the co-op shooter it’s working on in favor of getting the DUNE game out the door.
“The Management Board’s recommendation to the Supervisory Board will be to increase the focus on the Open World Survival segment with Games-as-a-Service business model. This recommendation is based on the fact that Conan Exiles continues to perform well [and] reflects the belief that both the Dune IP and the Survival games genre are a good match with a large long-term potential. The Management Board is of the opinion that these factors justify a more ambitious Dune project to launch after around two years of production time. Such increased focus would require a redirection of resources from other initiatives, the most significant being the co-op shooter game, initially scheduled for release during 2020 that has been impacted by scope changes due to external/market pressures with increasingly strong competition and internal delays. The Management Board believes that the scope and ambition level for the Dune game should be larger than Conan Exiles to allow the game the best possible chance of maximizing its very large potential. If these proposed changes are approved by the Supervisory Board, it is likely that the Company will need additional financing to supplement the revenue generated from current operations. In summary, the Management Board believes delaying the abovementioned co-op shooter game until after the release of the Dune game and securing the necessary funding to support this plan will lead to the best long-term success for the Company and will bring these matters to the Supervisory Board for discussion and decision as soon as possible considering the restrictions connected to the voluntary offer by Tencent Cloud Europe B.V.”
Separately, the board “unanimously” recommends that Funcom’s shareholders accept Tencent’s offer, so it seems like mostly a done deal. We once again point out that Tencent also has small to large stakes in Grinding Gear Games, Riot Games, Frontier, and Epic Games.