Date
19 August 2017

Game developers make merry on Alibaba move

Alibaba Group has announced the launch of its own mobile games platform, putting an end to the monopoly era of internet giant Tencent Holdings (00700.HK) in that key segment.

Alibaba’s entry into the business comes amid an apparent change in its thinking, given that group founder Jack Ma {馬雲} once said that mobile games is a business that he will never set foot in. The group’s latest announcement definitely marks a key milestone for the game industry. That said, Tencent still offers the largest platform for mobile game developers as of now.

Alibaba spokesperson Wang Shuai said the group has been disturbed with the monopoly situation prevailing in the market. Mainland media quoted Liu Chunning, chief of Alibaba Group’s digital entertainment department, as saying that the group will provide completely free services for single-player stand-alone games on the platform for the first year. Revenue from jointly operated games will be split in the ratio of 70 percent for the game developer and 20 percent to Alibaba while 10 percent will go as donation to a rural education fund, according to a report on news portal 163.com.

Such revenue split ratio is welcome news for game developers, as Tencent currently offers only 10 percent 10 percent share to developers for jointly operated games.

Reflecting the expected benefits from the Alibaba move, share prices of game developers soared on Wednesday. IGG Inc (08002.HK), which launched its popular game “Castle Clash” on Tencent mobile games platform today, surged 30 percent. Among others, Boyaa Interactive International (00434.HK) also shot up 30 percent and Forgame Holdings (00484.HK) rose over 15.5 percent.

Investors also piled into software plays, helping Kingsoft Corp. (03888.HK), Sinosoft Technology (01297.HK) and NetDragon Websoft (00777.HK) post gains in the 3.9 percent to 8.0 percent range.

Among other gainers Wednesday were Macau gaming stocks, which continued their winning streak. Galaxy Entertainment (00027.HK) climbed another 3.8 percent after surging 5.7 percent in the previous session. The counter has added 28.6 percent since the start of December.

In other news, Chinese handset maker China Wireless (02369.HK) said its stock will be traded under “Coolpad Group” starting from tomorrow, as the brand name Coolpad is more well-known in the market. The stock moved 12.9 percent higher on the day.

Hong Kong’s benchmark Hang Seng index closed up 283 points or 1.25 percent at 22,996 points, while the Hang Seng China Enterprises Index, the main gauge for H shares, added 0.92 percent to 10,329 points. On the mainland, the Shanghai Composite index dropped 0.15 percent to end the day at 2,044 points.

– Contact the writer at [email protected]

RC

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