Leading Chinese game developer and publisher Shanda Games has announced an agreement to acquire affiliates Shanghai Shengzhan Networking Technology and Tianjin Shengjing from parent Shanda Interactive Entertainment in a transaction valued at US$811.5 million.
Shanda Games currently pays service fees to both companies for user services including online billing, customer service and data support, as well as prepaid card marketing and distribution. In the first quarter of 2013, fees paid to Shengzhan and Shengjing represented approximately 21.3 per cent of Shanda Games’ total net revenues.
Shengzhan owns the Shanda Pass database which contains account information and other user data that gamers use to access titles operated by Shanda Games, and operates the customer support services which handle approximately nine million interactions with Shanda Game users on average per month.
Shengjing owns approximately 180,000 prepaid card distribution channels in China, with over two million real and virtual prepaid cards sold monthly on average.
Shanda Games’ chairman Chen Tianqiao commented, “Through this transaction, the Board aims to strengthen Shanda Games both strategically and financially. The acquisition is a strong step forward in strengthening our mobile business, which now forms an integral part of our strategy. For mobile games, platforms play a more important role than each individual game as mobile games tend to be smaller in scale and with shorter lifecycle than MMO games. Combining our cumulative expertise and resources in the online gaming industry, we will leverage the customer database and distribution channels operated by Shengzhan and Shengjing to build a consolidated mobile game platform.”
“The recent success of our mobile game Million Arthur in China demonstrated the great potential Shengzhan and Shengjing platforms have, on which we rely solely for promoting the game,” noted Chen in a statement regarding the acquisitions. “We believe this transaction will provide us with numerous synergies to establish our mobile platform and accelerate growth in our business. After further integrating our businesses, we plan to release the renewed and refined mobile strategy and products in the near term.”
Chen added, “Importantly, the transaction will enable Shanda Games to become a truly integrated online gaming company. With an in-house customer service team and the control of customer database and distribution channels, Shanda Games will be able to enhance game players’ experience and to reach out to users more efficiently.”
