Since the end of last year the Supercell gossip spread, many Chinese companies actively involved, but finally went to tencent.

Today, tencent's announcement said, after consultation with the Finnish mobile game developers Supercell, tencent will form a consortium to buy a 84.3% stake in Supercell, three period to pay, the transaction is expected to total about $8.6 billion.

Tencent's $8.6 billion mean? Shanghai Disney cost $5.5 billion, 5.5 billion end privatisation agreement could be nearly $9 billion, Reagan carrier cost $4.5 billion, north Korea's military spending was $4 billion per year. According to the deal, the Supercell as a 6 years old, just released four game, mobile game company, has been valued at $10.2 billion. And the swimming giant activision blizzard has a market value of only $28.9 billion.

So the question comes, buy a Supercell, 8.6 billion and $10.2 billion valuation value of the price? Tencent why Supercell loans also going to buy? If the deal really is the only good news?

Revenue of $194 million a month

Tencent, for $8.6 billion to buy a 84.3% stake in Supercell, not only in the China's biggest overseas acquisition records, is also one of the biggest worldwide pen acquisition.

The field of mobile game purchase amount is one of the biggest pen company purchase, set by activision blizzard. In November 2015, blizzard's $5.9 billion deal to buy the candy legend "developers King Digital Entertainment. King Digital Entertainment, the annual profit of $517 million, $2 billion, and 2015 years to reach 474 million active users.

With King Digital Entertainment for reference, Supercell2015 annual revenue of $2.326 billion, net profit of $964 million, according to the Supercell's game daily active users has reached 100 million. Two full-year revenue about, but the valuation is nearly two times, where is the gap between the main?

A, because income is almost, but Supercell2015 year profit is King Digital Entertainment, nearly 2 times.

Second, blizzard acquisition King Digital Entertainment, King Digital Entertainment has been weak. In the fourth quarter of 2015 was less than expected earnings, and full-year profit, revenue and turnover fell, declines in 10%, 12% and 10%. And still keep growing Supercell2015 years, revenue and profit year-on-year growth of 37% and 37% respectively.

Three, King Digital Entertainment is not can be difficult to replicate the success, there is a single product, transition rely on "candy legend" problem. While the Supercell released almost all four games a great success, especially after "tribal conflict", in 2016 the new "royal war" around the world each big seller again bully, and average monthly income is around $100 million, proved to be able to continue to make super s-class products around the world.

Four, King Digital Entertainment has 1400 people team. Supercell has only 190 people, cheaper, more efficient.

Three game of tencent mobile game revenue by 72%

"Royal war", released in January 2016, that is to say 2015 revenue of $2.326 billion, net profit of $964 million, is the "tribal conflict", "island" and "cartoon farm" game three, called "crazy money machine" not too much.

To end game giant activision blizzard compared to tencent mobile game business, Supercell is victory.

Blizzard on revenue of $4.66 billion in 2015, net profit of $892 million. Supercell revenue in 2015 to half the blizzard, but profit is more than the blizzard. From the point of time and product, Supercell only 6 years old, and blizzard has a history of 25 years. Supercell only four games, while blizzard warcraft, starcraft, diablo series and the watchman pioneer, hearth legends game.

Compared with those of the buyer of the tencent tencent's mobile game earned 21.3 billion yuan in 2015, Supercell with three game accounted for nearly 72% of tencent's revenue. Modified the revenue since 2015, tencent rules, will be the sole agent of mobile games with the third party developers into income, as well as the channel cost shall be recognized as income, if deduct this part, the proportion bigger, I'm afraid.

According to the tencent's purchase price, the Supercell currently valued at $10.2 billion. Contrast Chinese gaming companies usually valuations, $10.2 billion is definitely not a expensive deal.

To p/e ratio, according to the net profit of the Supercell PE value of 10.6, in the international capital market for common PE valuation levels, game company in the normal high level. After in the world, the basic PE valuation of the company are not more than 10 to the game. And domestic often give to 30 to 40 times, even more than one hundred times.

Tencent need Supercell in addition to the games and social networking

Prior to tencent, sources say, ali and giant union ever also was once very close to the Supercell. But the addition of tencent, constantly improve the price to $8.6 billion, finally forced back ali and giant. Tencent also at a London interbank lending rates higher lending rates by 102 basis points, to exceed 20 bank loans by $4.4 billion.

Are all for tencent, the acquisition of Supercell, is not only a Supercell can bring immediate benefits to tencent, the development of the game, also about the globalization strategy and social strategy.

According to the revenue and profit of Supercell, acquisition and table, can see the effect immediately is that rising revenues, profits and cash flow.

From the perspective of the layout of the game, mobile game of tencent overseas layout is mainly in South Korea and southeast Asia, Europe and the United States market layout is relatively weak. Supercell for tencent's international expansion and international brand strategy, highly complementary. In hand travel markets are becoming more towards quality and heavy, under the trend of Supercell excellent game team and product, the meaning of product innovation is also very important for tencent in the future.

Supercell, except for the game, the game's 100 million active users and 250 million game within the community and the global market, for tencent's social business may also be a rare breakthrough.

The hand of the tencent qq, WeChat platform users in domestic growth slowing, WeChat on going out, on the other hand, although devoted huge, but the effect is not satisfactory, even in Asia are difficult to compete with the Line, WhatsApp.

Supercell has made it clear that the future will be and tencent to discuss the social play of the game, then WeChat or hand Q account access and it can be expected. For promoting social tools, relationship is very important, import the original user, through the game way before their import more convenient.

Why the Supercell took a fancy to tencent?

Though softbank shares held Supercell73.2 %, the remaining shares are held in the hands of the Supercell managers and 180 employees, and Supercell is independent operation, the team itself with greater degrees of freedom and self-determination. So the acquisition, the opinions of the Supercell team is also very important.

Supercell CEO Ilkka Paananen consider most when it comes to their long-term development. Finally choose to tencent, think tencent can make Supercell is important development by leaps and bounds.

"First of all, according to the agreement, after completion of the acquisition, the Supercell will still be independent operation, remains small, independent team culture. Secondly, China's number of game players is the world's most. Tencent platform users covered more than 1 billion people, separate the repeated more than 300 million users, but also through the tencent's social networking platform, and explore more social game."

Ilkka Paananen think tencent President liu chiping 'enthusiasm for the game, and tencent previously had acquired fist company (Riot Games) experience is also a Supercell value.

The fourth is tencent Supercell can continue to maintain the private identity, does not need to be listed, also do not need to short-term interests under the financial pressure.

At four o 'clock I'm afraid this is the other Chinese companies are competing for the Supercell important reason for the defeat. In addition there are very few of the Internet and game companies can take out $8.6 billion, can take out money to baidu and ali, have no experience in game development and distribution. Which other game company, only see short-term interests, not only easy but also difficult to ensure independence.

The scenery behind have a concern

Although acquisition Supercell outlook looks like a piece of good, but they are also have good concern.

From Ilkka Paananen after acquisition of speech, he felt that the cooperation with tencent, can bring the team all the listed company has the advantage of Supercell employees can according to intend to sell in the future in the hands of Supercell shares (all).

Under $10.2 billion a high valuation, a Supercell is already to the exit timing is suitable. For any company, this time is easier to meet employees' cash exit, for Supercell, more dangerous, the company has only 190 employees, a greater risk of exit for the team.

In addition, mobile game company's performance is not stable, generally easy to ups and downs. Company and Rovio is example, unable to continue or replicate the success of the phenomenal products, highest market value dropped by 80%.

Although the Supercell with a phenomenal product "the royal war" broke the spell, but compared to the tribal war, the royal war faces product user erosion, short life cycle. Compared with a product for two years or so of rhythm, also let the company is in a state of high risk.

And the adaptation of the tencent is also a risk, tencent before investing a lot of overseas companies are facing new high-quality goods game, it is difficult to imagine Supercell can is an exception is worth observing.