It was recently announced that Sony is placing a bid for Leyou Technologies Holdings; the company currently owns a majority stake in Warframe developer Digital Extremes.
The Japanese tech giant is working on the possible bid for Leyou with a financial advisor, reports claim. In May, the Chinese gaming company announced it had received a non-binding takeover offer from Shenzhen-listed rival Zhejiang Century Huatong Group.
Attendee Kristen Sarah uses Sony's Playstation VR at the Sony booth during CES 2018 at the Las Vegas Convention Center on January 9, 2018 in Las Vegas, Nevada. CES, the world's largest annual consumer technology trade show, runs through January 12 and features about 3,900 exhibitors showing off their latest products and services to more than 170,000 attendees.
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Sony wants to buy Leyou Technologies, an overseas investment firm that has attached a range of high-profile IPs and entrepreneurs, sources told Bloomberg.
The buyout will provide Sony with a host of big free-to-play breadwinners such as Warframe, Dirty Bomb, and other projects such as the forthcoming Lord of the Rings MMO.
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Leyou is a Hong Kong-based, video game holding firm. They own Digital Extremes, Splash Damage, Athlon Games, Kingmaker, Radiance Games and has a 20 percent stake in Certain Affinity.
The video hame holding firm is also working with Amazon.com Inc., according to its website, and has produced several game developer subsidiaries.
Meanwhile, Digital Extremes are the developers of Warframe, a popular free-to-play title. Splash Damage, on the other hand, has done support work on the Gears of War franchise, including leading development on Gears Tactics. Splash Damage is also working on a Stadia-exclusive game.
Leyou shares rise after Sony bid report
After the Bloomberg News report, Leyou shares extended their gains to as much as 9.8 percent. This year, their stock has risen around 20%, giving the Leyou a market cap of about $1.1 billion.
Sony, meanwhile, gained over $18 billion in 2019 from gaming at PlayStation. Leyou's arsenal of licensed and F2P games will significantly add to those earnings and give the Japanese games giant a stronger foothold in the Chinese and global markets.
Leyou's controlling shareholder, Charles Yuk, spoke with iDreamSky late last year for a majority stake sale. Bloomberg News reported in April that iDreamSky, which includes Tencent Holdings Ltd. among its creditors, had been in talks with CVC Capital Partners on a joint bid valuing Leyou at about $1.23 billion but the COVID-19 pandemic brought their talks to a halt.
Sony believes it can beat out other bidders with greater financing certainty, the people said. Leyou's Yuk aims to pick a buyer and sign an agreement as soon as the people said this month.
Sony acquired Insomniac Games in 2019 for about $229 million, mainly in cash. Unless this bid and eventual purchase were to go through, it is currently uncertain whether these studios will be merged into Sony Worldwide Studios or remain independent.
No final decision yet.
Talks have continued but no final decision has been made, the people said. Other bidders could still emerge, they also mentioned. Leyou and Sony officials, meanwhile, have declined to comment.
Recently, Sony aimed to update its content arsenal as tech giant chief executive Kenichiro Yoshida believes it will boost the appeal of its branded consumer electronics hardware. That includes PlayStation 5, the latest console for video games which the company plans to launch at the end of this year.
Leyou's Warframe is now available on PlayStation 4, and the company said it expects to extend the game to more platforms, including the next-generation consoles, in its latest earnings report.
