Tencent subsidiary Aceville has purchased approximately two million shares of Shift Up, best known for its hit game Goddess of Victory: Nikke. The purchase cost ₩79.9 billion ($58.8 million), and follows Tencent’s acquisition of 20% of Shift Up in 2022, bringing its total stake in the company to 24% and making it Shift Up’s largest investor.

Shift Up has proved an attractive target for investment with Wemade first investing ₩10 billion ($7.4 million) into Shift Up in 2018, purchasing a 4.3% stake. At the time, the company was best known for its hit title Destiny’s Child, with Goddess of Victory: Nikke in production. The latter was eventually distributed worldwide by Tencent and proved to be a massive success, with revenue exceeding four billion yuan ($546.6 million). This strong showing puts the title just behind only PUBG Mobile in terms of success in overseas markets for a Tencent title. As such, Tencent’s decision to invest in Shift Up feels like a natural progression of the existing business relationship.

Tencent's purchase is notable in that it follows Wemade entirely divesting itself of all its Shift Up stock just two days ago. The sale saw it generate a profit of around ₩70 billion ($51.7 million) over the five years it held the stock. While Tencent is seemingly eager to further its reach outside of China, it appears that Wemade feel that now is the perfect time to cash out.

Alongside Tencent, another unnamed party also purchased some of the shares.

"The role of Wemade's investment is to help developers lay the foundation for success and mutual growth,” said a Wemade spokesperson. “Now that our role has been fulfilled, we have decided to sell our shares.”

The question remains, what is the intent of Wemade’s sale? This isn’t the first time that the company has sold a stake in a profitable company, with the company seeing a 2000% return of investment from its sale of Lion Heart Studio last year. Wemade remains focused on blockchain projects and as such investment in Shift Up doesn't align with ongoing intent, but has served as a smart way to raise funds.

Diversifying interests

The success of Goddess of Victory: Nikke had a demonstrable effect on Shift Up’s valuation. Gamelook estimates that the company’s value has increased eightfold over the last five years, with a valuation of v1.9 trillion ($1.4 billion).

Many Chinese companies, including Tencent, have increasingly been making moves outside of China in order to combat increasingly strict regulations imposed by the Chinese government. Korea is an established powerhouse in the mobile gaming scene, and Tencent’s strong working relationship with Shift Up makes the company an attractive prospect for investment.

It’s possible that Tencent will continue to snap up shares until it has a controlling interest in the developer.

We listed Tencent as one of the top 50 mobile game makers of 2023.