By
Chimamanda U. Martha
January 19th, 2024
NetEase acquiring the gaming studio behind Star Wars Eclipse indicates the seriousness of its console ambitions.
Chinese internet tech behemoth NetEase has acquired Quantic Dream, the developer behind an upcoming Star Wars video game. NetEase announced the acquisition on Wednesday, as the Chinese tech giant looks to imprint its presence overseas. Quantic Dream represents NetEase’s first fully-owned gaming studio in Europe amid the Hangzhou-based corporation’s aggressive international push. Since the Chinese domestic gaming market hit a lull due to stiffer regulation, firms like NetEase and Tencent have been increasingly looking at markets overseas.
NetEase Acquisition of Star Wars Developer Underscores Global Console Agenda
Although Tencent has had the edge in investments and acquisitions of foreign gaming companies, NetEase is now closing the gap. The Ding Lei-founded company has already established gaming studios in Japan and the United States this year alone. A press release stated that Quantic Dream, a French game developer, will look to create and publish video games on all platforms. In addition, the NetEase-acquired Star Wars game developer will also focus on “supporting and publishing third-party developed titles.”
NetEase’s primary revenue has typically come from its PC and mobile gaming ventures. This is because these two formats are wildly popular across China. Put in perspective, mobile gaming used to constitute more than half of NetEase’s global gaming haul. However, more recently, the tech giant and internet services specialist has forayed into console games. Furthermore, buying Quantic Dream underscores NetEase’s ambitions to gain a foothold in the console market. This is in addition to its already established stable of mobile and PC gaming.
Global Console Boom
Back in 2021, estimations posed that global console market revenue would reach $49.2 billion. This projection came amid increasing efforts by industry staples like Sony, Microsoft, and Nintendo, all also launching consoles in China. Before 2014, the trio of gaming giants could not launch their products in the East Asian nation due to a ban that lasted for 14 years. However, the ban’s suspension in 2014 has not only seen an influx of consoles in China, but a more recent development among Chinese tech companies. These companies, constrained by steep local regulations, are also looking to tap into the lucrative global console market. Speaking on this evolving development at the time, Frank Mingbo Li, the founder of Tencent-backed gaming studio, Studio Surgical Scalpels, said:
“For the global market, the console is huge — roughly like 30% revenue. But in China, it’s only 1% and so there’s a huge potential opportunity for the console game developer inside China.”
In addition, Daniel Ahmad, senior analyst at Niko Partners, also observed at the time that “despite consoles being banned between 2000 and 2014, we are seeing high demand for consoles in China, and there is an even larger market for consoles outside the country.”
Lastly, Hu Zhipeng, vice president at NetEase also confirmed at the time in a media session with CNBC that “…one third of overseas market shares is taken by console games.”