By Sam Nussey
TOKYO (Reuters) - Shares in Japan's Marvelous Inc on Tuesday closed up 17% at their daily limit of 682 yen after the games maker announced China's Tencent Holdings Ltd would take a 20% stake.
Tencent will spend around 7 billion yen ($65 million) acquiring shares from Marvelous and its largest shareholders, Amuse Capital and its chief executive, Hayao Nakayama, a former Sega executive whose son founded Marvelous. It will pay 576 yen each - 1% below Monday's undisturbed closing price.
Marvelous said in a stock exchange filing it plans to use the funds to launch games franchises and for overseas expansion of current titles, which include farming simulator Story of Seasons: Friends of Mineral Town for Nintendo Co Ltd (T:7974)'s Switch console and cross-platform shooter Daemon X Machina.
The investment is the latest example of an influx of Chinese money and gaming content into Japan, where a largely unconsolidated industry underpinning the country's pop culture is having to compete with well-resourced overseas rivals.
"In comparison to Western companies there is a widening abyss in terms of development capability and financial clout," Marvelous said in a statement.
Tencent, the world's largest gaming company, launched mobile title Code: Dragon Blood in Japan last month, which currently sits in ninth place in gross rankings on Apple Inc (NASDAQ:AAPL)'s App Store, showed data from analytics firm App Annie. Peer NetEase (NASDAQ:NTES) Inc's battle royale game Knives Out is second.
"Tencent is after the magic of Japanese companies creating 'otaku' geek-orientated content," said Serkan Toto, founder of game industry consultancy Kantan Games, referring to the niche but lucrative fan base for products spanning games, animation and comic books.