Alibaba pays USD 145M to expand into mobile gaming

The chinese tech company announced an investment of USD 145 million in the mobile gaming industry. The firm recently signed a partnership with Mail.Ru Group, TFJoy, Efun and ONEMT to establish the “Global Strategic Alliance of Game Distribution”.

The newly established alliance offers an upgraded gaming experience to local users and tries to reach more markets such as Russia, Europe, Japan, Middle East and the US.

China is the biggest market for online gaming, and is forecasted to hit a size of USD 12 billion by 2020, according to PricewaterhouseCoopers research. However, players in this industry in the country are facing the challenges in terms of passing government censors and the restriction of social media use.

“The development in mobile games market in the five biggest international market – Europe and the US, Japan and South Korea, the Middle East, Latin America and Southeast Asia, is uneven. European, American, Japanese and South Korean markets are already considered mature markets, while the Middle East in the past two years is seeing rapid development, and Latin America and Southeast Asia as the emerging markets show very high potential in the mobile games consumption. We are doing very well in emerging markets like India and Indonesia already,” said Simon Shi, president of Alibaba Games.

It is a showcase for Alibaba’s strategy of going beyond e-commerce and payment, even after the firm has expanded to movie and entertainment. Entering the gaming sector, Alibaba Games will compete directly with NetEase and Tencent, the two largest players which altogether take up a 60 per cent market share.