TENCENT Holdings Ltd said yesterday it could help Snapchat owner Snap Inc publish video games and improve advertising sales after acquiring a 12 percent stake in the US social media network.
Snap’s disclosure in a US regulatory filing that Tencent had recently bought 145.8 million of its shares on the open market set off a wave of speculation among investors about the relationship between the firms.
“The investment enables Tencent to explore cooperation opportunities with the company on mobile games publishing and newsfeed as well as to share its financial returns from the growth of its businesses and monetization in the future,” it said in an e-mailed statement. It also referred to the potential for “newsfeed ads.”
Games and a newsfeed have not been a part of Snapchat, although the company on Tuesday said it was planning a redesign.
Analysts say Tencent, the world’s largest gaming company by revenue, has benefited from its social media apps for the phenomenal popularity of its smartphone games such as Honour of Kings, and will need the help of local social networks in promoting its games in overseas markets.
The companies operate on different scales. Tencent’s holdings include messaging apps QQ and WeChat, both ubiquitous in China, and its market capitalization of US$469 billion is among the largest in the world. Snap’s is US$15 billion.