Yesterday evening, China Ruyi announced that it would acquire 100% of the equity of Youai Interactive Entertainment for 259 million yuan, on the grounds that it is optimistic about the considerable future income of the “Red Alert OL” project.
The announcement stated that China Ruyi signed an equity transfer agreement with the sellers Beijing Zhaoxi Guangnian Information Technology Co., Ltd. and Beijing Youyi Technology Co., Ltd. on May 7, 2024. According to the agreement, Beijing Ruyi will acquire all shares of Beijing Youai Interactive Entertainment Technology Co., Ltd., with a transaction amount of RMB 259 million (subject to adjustment).
After the equity transfer is completed, Beijing Youai Interactive Entertainment Technology Co., Ltd. will become an indirect wholly-owned subsidiary of China Ruyi. At that time, the financial results, assets and liabilities of Youai Interactive Entertainment will be merged into the accounts of China Ruyi Group. The announcement revealed that Youai Interactive Entertainment’s 2023 unaudited financial report data shows that the company’s net asset value is approximately RMB 343 million.
China Ruyi also explained the reasons for the acquisition in the announcement. China Ruyi believes that the core asset of Youai Interactive Entertainment is the “Red Alert OL” project. The IP of this project originates from the well-known stand-alone game IP “Red Alert” of the American Electronic Arts Company, which has a deep market foundation and a wide range of player groups.
“In the past three years, the performance of the “Red Alert OL” project has been stable. Based on the life cycle of the simulation game, China Ruyi believes that the “Red Alert OL” project will still have considerable profits in the future, and its R&D assets will also maintain high commercial value. , in line with the company’s acquisition standards.”
It should be noted that before this acquisition, the distribution, operation and promotion services of “Red Alert OL” under Youai Interactive Entertainment have been authorized to Tencent, and Youai Interactive Entertainment enjoys payment sharing until October 2025. January 17th. Now after the equity transfer is completed, this authorization agreement will also become a continuing related party transaction of China Ruyi. In the short term, Tencent will still be responsible for the distribution, operation and promotion services of “Red Alert OL”.
China Ruyi is a rising star in the game industry. It began to develop its game business in 2022 and is rising very fast. The financial report shows that China Ruyi Games’ revenue in 2023 was 446 million yuan, a year-on-year increase of 703%; the adjusted profit was 967 million yuan, a year-on-year increase of 276%.
At present, most of the products distributed by China Ruyi are from Tencent, and its products in operation include “Chasing the King in Troubled Times” and “Legendary World”. This year, China Ruyi represented Happy Interactive Entertainment’s MMORPG game “Ragnarok: Love Like First Meeting”, which performed well. Its new products include the SLG product “World Qiyuan” developed by Tencent and the strategy games “Battle Road” and “Wild Country”. The latter two are both produced by small and medium-sized game manufacturers invested by China Ruyi.
The acquisition of Youai Interactive Entertainment by China Ruyi is intended to strengthen the competitiveness of its gaming business. This acquisition is also the first disclosed gaming business destination after ByteDance’s business adjustment.
Since the sudden adjustment of ByteDance’s business direction and organizational structure at the end of 2023, and the plan to exit the game business, ByteDance’s game companies and studios include Mutong Technology, Youai Interactive Entertainment, Zhaoxi Guangnian, and Hangzhou Jiangnan Work Studio, Shenzhen Gravity Studio, Oasis Studio and other destinations have attracted widespread attention in the industry.
Earlier, Mr. Gyro reported on ByteDance’s other gaming business developments. Among them, Mutong Technology was confirmed by its CEO Yuan Jing that it will operate independently. Hangzhou Jiangnan Studio and Shenzhen Gravity Studio, formerly owned by ByteDance, merged to form a new company, Saros Network Technology (Shenzhen) Co., Ltd. The new company, Saros Network, will operate independently and will be led by the head of Shenzhen Gravity Studio. Saros Network is also one of the many game companies invested by Tencent.
As for the whereabouts of Oasis Studio, Game Top has learned from people close to Byte that both Oasis Studio and the “Crystal Core” game have been sold, but it is not clear who the targets are. Earlier, there were rumors in the industry that FunPlus was interested in taking over Oasis Studio, but there has been no official response. However, according to news revealed by the media, the “Crystal Core” game will be sold through a bidding method such as “flow × valuation multiplier” and other valuation methods. The price is relatively high, and it may be medium and large game manufacturers that can take it into their pockets.
After successively selling its related game assets, ByteDance also has a new positioning for its game business direction and organizational structure.
In March this year, it was reported that ByteDance would re-incubate the game business. Yan Shuo, the former head of Chaoxiguangnian business, will be transferred to the company’s finance department. Hua Wei, the head of human resources, will serve as the head of the game business, managing UGC, Mu Tong and Day and night light years. In April, news came out from ByteDance that Zhang Yunfan, the former president of Perfect World Games, would take over as the head of Chao Xi Guangnian after taking charge of some affairs of Mutong Technology. However, Zhaoxi Guangnian and Mu Tong did not respond to the news.
From the end of last year to the present, the sale of ByteDance’s game assets has been attracting market attention. After China Ruyi acquires Youai Interactive Entertainment, we will continue to pay attention to whether there will be new trends in other game assets.
