hong kong
CNN Business
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US game software developer Unity is joining forces with some of the biggest names in Chinese tech to form a billion-dollar joint venture to expand its business in the world’s largest online gaming market.
The company will “open up new opportunities” to strengthen cooperation with local businesses and increase investment in research and development to better meet the needs of Chinese creators, Unity said Tuesday evening in a statement posted on Chinese social media platform WeChat.
The San Francisco-based company first entered China in 2012 and has powered many of the country’s most popular games with its software tools, including Tencent’s Honor of Kings (TCEHY) and miHoYo’s Genshin Impact.
But the expansion of US business into China comes at an uncertain time for the world’s second-largest economy. Beijing’s crackdown on major internet brands has hurt growth, and rising tensions with the United States over Taiwan and other geopolitical issues are fueling a technology arms race.
The local partners he plans to work with include major players in the Chinese tech industry: Alibaba (BABA), China Mobile (CHL), ByteDance’s Douyin Group, smartphone company Oppo, Xiamen-based online game developer miHoYo, G-Bits Network Technology, and PCI Technology, an AI technology service provider.
Unity will have majority control of its business in China, he said. The company will be valued at 1 billion dollars following investments by local partners.
Junbo Zhang, who currently serves as Unity’s general manager for Greater China, will lead the company as president and CEO, the company added.
China has been the world’s largest gambling market since 2017, but investors have recently worried about the impact Beijing’s internet crackdown and economic downturn will have on the industry.
Since late 2020, Chinese authorities have launched an extensive campaign in an effort to rein in big players in sectors ranging from technology and finance to gaming, entertainment and private education. Last August, authorities banned online gamers under the age of 18 from playing on weekdays.
In 2021, China’s gaming industry generated total revenue of nearly $47 billion, up 6.4% from the previous year. Although this represents much slower growth than in 2020, gaming revenue in China still accounted for more than a fifth of the global market, according to recent estimates from global accounting firm PwC.
In an interview with Chinese tech media site 36kr last month, Zhang, Unity’s China director, said the company plans to hire around 1,000 software engineers in China over the next few years. Unity did not respond to a request for comment on the reported hiring plan.
