Tencent Reportedly Could Make a Multibillion-Dollar Push to Acquire Take-Two Interactive or EA
Tencent Holdings (OTC: TCEHY) is one of the world's biggest entertainment and media companies, and the Chinese tech giant is in the midst of a years-long push to buy up video game companies. A recent report from news website TMT Finance suggests that Tencent may have its eye on some of the biggest U.S. gaming publishers, namely Electronic Arts (NASDAQ: EA) and Take-Two Interactive (NASDAQ: TTWO).
EA and Take-Two are titans in the American gaming industry, with market capitalizations of roughly $43 billion and $24 billion, respectively. A move from Tencent to acquire either publisher would be an industry-shifting development.
Image source: Getty Images.
It's still unclear whether Tencent will mount a serious push to purchase either EA or Take-Two. Some sources in the TMT Finance report suggest that major South Korean developers including Netmarble and Nexon may be more likely acquisitions targets in the near future. Either way, Tencent will almost certainly continue to make big purchases in the gaming industry.
Video games have levels of engagement that trounce nearly every other entertainment medium, and some gaming companies could see growth opportunities extend beyond their current core businesses. Take semiconductor company NVIDIA, for example. The transition from specializing in graphics processing units for high-end gaming experiences, to providing hardware for data bases, artificial intelligence, and machine vision redefined the company and powered incredible stock gains.
In addition to thriving core businesses that have big room for growth, top gaming companies may be able to tap into trends including artificial intelligence, augmented reality, and e-commerce. The future for gaming and interactive media remains very bright, and Tencent's investment in these categories could have huge payoffs over the long term.
10 stocks we like better than Tencent Holdings
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Tencent Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of November 20, 2020
Keith Noonan owns shares of Take-Two Interactive. The Motley Fool owns shares of and recommends NVIDIA, Take-Two Interactive, and Tencent Holdings. The Motley Fool recommends Electronic Arts. The Motley Fool has a disclosure policy.
