Wikipedia

Leyou

Leyou Technologies Holdings Limited(simplified Chinese:Nhạc du khoa kỹ khống cổ hữu hạn công tư;traditional Chinese:Nhạc du khoa kỹ khống cổ hữu hạn công tư;[1]formerlySumpo Food Holdings Limited) is a Chinese video gameholding companybased atLippo Centre,Admiralty,Hong Kong.[2]Founded in 2010, the company originally dealt withpoultrythrough its subsidiary Fujian Sumpo, which had been founded in 1998. After floating on theHong Kong Stock Exchangein January 2011, poultry-based income started to fall in 2013. It agreed to buy a majority stake in the video game developerDigital Extremesin October 2014, renamed itself Leyou in January 2015, and completed the acquisition later that year. It acquiredSplash Damagein July 2016 before divesting its poultry business in August, majority-acquired Radiance Games, and invested inCertain Affinityin 2017, and establishedAthlon Gamesin 2018. In December 2020, Leyou was acquired byTencent.

Leyou Technologies Holdings Limited
FormerlySumpo Food Holdings Limited (2010–2015)
Company typeSubsidiary
IndustryVideo games
Founded22 February 2010;14 years ago(2010-02-22)
FounderLin Qinglin
HeadquartersLippo Centre,
Hong Kong
,
China
ParentTencent(2020–present)
Subsidiaries

History

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Background in poultry (1998–2011)

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Lin Qinglin founded and became thegeneral managerof Xiamen Xian Wu Modern Office Facilities Operation Company in January 1985 and served until June 1998. The company acted as an agent forfax machinesmanufactured byPanasonic.During the late 1990s, theLongyanlocal government encouraged investments in chicken processing operations. Lin had already opened a food shop inXiamen,which he incorporated as Xiamen Sumpo Group Limited in June 1998. Using the profits from his previous venture, he established the meat production company Sumpo (Longyan) Industrial Co. Ltd. in Longyan in September. Lin oversaw the latter's main business, which dealt with chicken products, animal feed, and chicken seedlings. Among the company's clients wereMcDonald's,KFC,andDicosinmainland China.Lin stepped down as thechairmanof Sumpo (Longyan) Industrial in March 2003 to focus on the operations of Xiamen Sumpo. His brother, Lin Qingrong, replaced him at Sumpo (Longyan) Industrial, which was renamed Fujian Sumpo Foods Holdings Co., Ltd. in January 2007. In July of that year, Lin Qingrong's Longyan Investment acquired 10% of the company and Lin Qinglin re-assumed its chairman position, which became his primary focus. Subsequently, the company underwent a corporate reorganisation and evolved into a large food processing business, producing 10,000 tons of meat and 180,000 tons of "Sumpo" -branded seed annually. It had a net profit ofCN¥57 million in 2009.[3][4]

On 22 February 2010, Sumpo Food Holdings Limited was incorporated as aholding companyin theCayman Islands,acquiring the outstanding 90% of Fujian Sumpo. It completed aninitial public offeringon theHong Kong Stock Exchangein January 2011 at an issue price ofHK$0.68per share. Lin Qinglin, serving as the company's chairman andchief executive officer(CEO), was the principal shareholder at 642 million shares, while his son, Lin Genghua, owned another 167 million. The combined 809 million shares were worthHK$550 million.[3][4]

Entry into video games (2013–2015)

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Due to increased competition in the animal breeding industry, Sumpo Food Holdings started continuously losing money from 2013. To diversify its business, the company aimed at entering thevideo game industry.Initially, it attempted to acquire an undisclosed Japanese developer, speculated to beSNK,but was unsuccessful.[4]According to Alex Xu, thechief business officerof the video game companyPerfect World,Sumpo Food Holdings was "almost out of business" in early 2014. At the same time, Perfect World was cooperating with and seeking to acquireDigital Extremes,a Canadianvideo game developer.However, Perfect World was considering delisting itself from theNasdaqand wanted to avoid pursuing an acquisition using internal funding. At Xu's behest, the companyleveragedSumpo Food Holdings to incrementally acquire Digital Extremes.[5]This move was announced in October 2014, with Sumpo Food Holdings to acquire a 58% stake, while another 3% would be sold to Perfect Online, asubsidiaryof Perfect World. The total price for both stakes wasUS$73.2 million.[6]

In January 2015, Sumpo Food Holdings changed its name to Leyou Technologies Holdings Limited.[1]The acquisition of Digital Extreme's shares was completed in July 2015.[4][7]By the end of that year, 70% of Leyou's gross profit was generated by its games business, despite 80% of all revenue being generated by its poultry business.[7][8]The company acquired the remaining 39% in Digital Extremes in May 2016 forUS$65 million.[4][9]In July 2016, via its UK subsidiary Radius Maxima, Leyou acquired three companies: The developerSplash Damage,online back-end technology company Fireteam, and online multiplayer publisher WarChest. All three were previously solely owned by their founder and CEO,Paul Wedgwood.[7][10]

Exit from poultry and acquisition by Tencent (2016–present)

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During 2016, Perfect World attempted to acquire Leyou, but the deal fell through due to "some difficulties".[5]Leyou divested its entire poultry business in August that year, selling it to Lin Qinglin's wife for CN¥215 million.[8]CP Pokphand Co., which was majority-owned by the Thai food companyCharoen Pokphand Foods,subsequently acquired 70% of Fujian Sumpo in October 2016 for CN¥323 million. The previousfiscal year,Fujian Sumpo had revenues of CN¥1.32billionbut made a net loss of CN¥30 million.[11][12]By 2017, the majority of Leyou's shares had been bought out by a private investor. Xu, who had since left Perfect World forQihoo 360,was subsequently hired as Leyou's CEO in July 2017.[2][5]

In July 2017, Leyou investedUS$1 millioninto Chinese developer Guangzhou Radiance Software Technology Co. Ltd. (Radiance Games) to acquire 51% of the company.[13]It announced aUS$10 millioninvestment in the American developerCertain Affinityin October, gaining a 20% stake.[14][15]Leyou launched apublisher,Athlon Games,inCaliforniain May 2018.[16]In September that year, Athlon Games andMiddle-earth Enterprisesagreed for the former to publish a multi-year, onlinefree-to-playgame based onThe Lord of the Rings.[17]Amazon(through itsAmazon Game Studiosunit) joined the project in July 2019, agreeing to co-develop and publish the game worldwide, while Leyou would publish it in China and Taiwan.[18]Later that year, Athlon Games became the publisher ofSamurai Shodownand a shareholder and publishing partner ofLCG Entertainment,which acquired the assets of the defunctTelltale Games.[19][20][21]

In 2019, Leyou was reported to be seeking a buyer. iDreamSky (which was 18.6%-owned by the conglomerateTencent) andCVC Capital Partnersoffered to acquire Leyou, but the talks stalled due to theCOVID-19 pandemic.[22]iDreamSky was met with a competing offer from Zhejiang Century Huatong, which entered into a non-binding merger agreement with Leyou in May 2020.[23]Bloomberg Newsreported thatSonyand Tencent were also interested in bidding for Leyou as of July 2020.[24][25]By August that year, Tencent appeared to be close to signing a deal to acquire Leyou.[26]The Tencent deal was confirmed by Leyou's shareholders by 11 December 2020 and completed on 23 December 2020. Under theUS$1.5 billionagreement, Tencent fully acquired the firm through its subsidiary Image Frame Investment.[27][28]A dispute between Tencent and Amazon during contract negotiations for the plannedThe Lord of the Ringsgame led Amazon to cancel the game's development in April 2021.[29]The acquisition further caused an exodus of Leyou employees, particularly at theBeijingandShanghaioffices. Among them, Xu left in April 2021.[2]

References

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  1. ^ab"Change of Company Name and Stock Short Name"(PDF)(Press release). Sumpo Food Holdings. 23 February 2015.Archived(PDF)from the original on 18 October 2019.Retrieved18 October2019– via HKEXnews.
  2. ^abcYe, Josh (22 August 2021)."Analysis | Why Tencent spent US$1.3 billion to buy video gaming firm Leyou, but left it to languish".South China Morning Post.Archivedfrom the original on 11 September 2021.Retrieved13 September2021.
  3. ^ab"Sumpo Food Holdings Limited – Placing and Public Offer"(PDF)(Press release). Sumpo Food Holdings. 30 December 2010.Archived(PDF)from the original on 10 February 2021.Retrieved10 February2021– via HKEXnews.
  4. ^abcdeWu, Chunhui (25 August 2016).【 phụ dữ tử 】 gia tộc xí nghiệp chuyển hình đích bộ tử ứng cai hữu đa đại?[[Father and son] How big should the family business transformation be?].Huigu Family(in Chinese). Archived fromthe originalon 10 February 2021.Retrieved10 February2021.
  5. ^abcTakahashi, Dean (2 September 2017)."GamesBeat Boss interview: China's Leyou moves from chicken meat to triple-A game publishing".VentureBeat.Archivedfrom the original on 10 February 2021.Retrieved10 February2021.
  6. ^Handrahan, Matthew (16 October 2014)."Digital Extremes sells 61 per cent of shares for $73 million".GamesIndustry.biz.Archivedfrom the original on 10 February 2021.Retrieved10 February2021.
  7. ^abcHern, Alex (12 July 2016)."Chinese chicken supplier buys UK games developer Splash Damage".The Guardian.Archivedfrom the original on 10 February 2021.Retrieved16 July2016.
  8. ^abShubber, Kadhim (7 September 2016)."A strong contender for the weirdest deal of 2016".Financial Times.Archivedfrom the original on 10 February 2021.Retrieved10 February2021.
  9. ^"Leyou Technologies acquires 39% of Digital Extremes for US$65 million".Lexpert.July–August 2016.Archivedfrom the original on 10 February 2021.Retrieved10 February2021.
  10. ^Brightman, James (11 July 2016)."Splash Damage sold to Chinese poultry firm".GamesIndustry.biz.Archivedfrom the original on 12 July 2016.Retrieved21 March2018.
  11. ^Retuers Staff (26 October 2016)."BRIEF-Charoen Pokphand Foods Pcl says CTCI agreed to acquire Fujian Sumpo Foods Holding".Reuters.Archived fromthe originalon 10 February 2021.Retrieved10 February2021.
  12. ^Best, Dean (11 November 2016)."Charoen Pokphand Foods venture buys majority stake in Chinese poultry firm Fujian Sumpo".Just Food.Archivedfrom the original on 26 November 2020.Retrieved10 February2021.
  13. ^Retuers Staff (31 July 2017)."BRIEF-Leyou Technologies updates on investment agreement".Reuters.Archivedfrom the original on 10 February 2021.Retrieved10 February2021.
  14. ^Lorek, Laura (17 October 2017)."Austin Game Maker Certain Affinity Lands $10 Million Investment from Hong Kong Firm".SiliconHills.Archivedfrom the original on 10 February 2021.Retrieved10 February2021.
  15. ^Ivan, Tom (2 July 2020)."Sony is 'considering bidding' for the parent of Warframe and Gears Tactics studios".Video Games Chronicle.Archivedfrom the original on 23 October 2020.Retrieved2 July2020.
  16. ^Batchelor, James (23 May 2018)."Digital Extremes' Chinese owner stealthily launches new US publisher".GamesIndustry.biz.Archivedfrom the original on 5 August 2020.Retrieved24 May2018.
  17. ^Takahashi, Dean (4 September 2018)."The Lord of the Rings universe is getting a free-to-play online game from Athlon Games".VentureBeat.Archivedfrom the original on 10 February 2021.Retrieved10 February2021.
  18. ^Day, Matt (10 July 2019)."Amazon Will Co-Develop 'Lord of the Rings' Game With Leyou".Bloomberg News.Archivedfrom the original on 16 October 2019.Retrieved16 October2019.
  19. ^Romano, Sal (6 March 2019)."Samurai Shodown to be published by Athlon Games".Gematsu.Archivedfrom the original on 27 March 2019.Retrieved10 February2021.
  20. ^Campbell, Colin (28 August 2019)."Telltale Games is being revived".Polygon.Archivedfrom the original on 5 December 2019.Retrieved18 October2019.
  21. ^Takahashi, Dean (28 August 2019)."LCG Entertainment game veterans buy Telltale Games".VentureBeat.Archivedfrom the original on 4 December 2019.Retrieved18 October2019.
  22. ^Baigorri, Manuel (22 April 2020)."CVC, iDreamSky Talks for Hong Kong's Leyou Buyout Have Stalled".Bloomberg News.Archivedfrom the original on 30 September 2020.Retrieved8 July2020.
  23. ^Baigorri, Manuel (4 May 2020)."Hong Kong Gaming Firm Leyou Tech Gets a New Buyout Offer".Bloomberg News.Archivedfrom the original on 29 November 2020.Retrieved10 February2021.
  24. ^"Sony Weighs Bid for Hong Kong-Listed Gaming Firm Leyou".Bloomberg News.2 July 2020.Archivedfrom the original on 1 August 2020.Retrieved8 July2020.
  25. ^Baigorri, Manuel (10 July 2020)."Tencent in Talks to Acquire Hong Kong-Listed Gaming Firm Leyou".Bloomberg News.Archivedfrom the original on 10 July 2020.Retrieved10 July2020.
  26. ^Baigorri, Manuel (24 August 2020)."Tencent Nears Deal to Take Gaming Firm Leyou Private".Bloomberg News.Archivedfrom the original on 7 February 2021.Retrieved25 August2020.
  27. ^Batchelor, James (14 December 2020)."Leyou shareholders approve Tencent takeover".GamesIndustry.biz.Archivedfrom the original on 10 February 2021.Retrieved14 December2020.
  28. ^Stanton, Rich (23 December 2020)."Tencent acquires Warframe developer Digital Extremes and several other studios".PC Gamer.Archivedfrom the original on 23 December 2020.Retrieved23 December2020.
  29. ^Schreier, Jason(17 April 2021)."Amazon Cancels Lord of the Rings Game Announced Two Years Ago".Bloomberg News.Archivedfrom the original on 17 April 2021.Retrieved17 April2021.
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