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Tencent Buys Minority Stake in Dontnod

Dontnod's next game will be funded in part by Tencent's investment.
Dontnod's next game will be funded in part by Tencent's investment. / Photo courtesy of Dontnod

Chinese conglomerate Tencent continued its expansion into gaming Wednesday, when it announced it had acquired a minority stake in Life is Strange and Tell Me Why developer Dontnod.

Tencent's €30 million investment allows it to propose the appointment of a representative on Dontnod's board of directors. It won't give Tencent executive power over Dontnod. The investment, taken to fund Dontnod's development of games, comes accompanied by an agreement that Tencent will help it expand into China and mobile platforms.

China's gaming market is one of the largest in the world, but non-Chinese developers often struggle to break into it. Chinese regulations prevent companies from publishing games in the country without partnering with a Chinese company. Dontnod's future games will likely be sold in the country through Tencent's WeGame gaming platform as part of this effort.

This is Tencent's second major investment in an independent Western developer of the week, following its purchase of a majority stake in Klei Entertainment on Friday. The company also owns Riot Games and holds minority stakes in Activision Blizzard, Ubisoft, Epic Games, and plenty of other major gaming companies.