Why Tencent is looking to buy Warframe parent company Leyou

After rumors surfaced that Sony was considering acquiring Hong Kong gaming company Leyou Technologies, the focus is now shifting to Tencent. In a note to investors, Leyou confirmed that it is in talks with Tencent about an acquisition. The two companies agreed to terms on a three-month exclusive window for talks about Tencent taking Leyou private. This effectively ices out any other firm from acquisition talks — and that includes Sony and its PlayStation brand.

Leyou is an appealing acquisition target because it has a number of talented game-development studios. Most notably it owns Dirty Bomb developer Splash Damage and 97% of Warframe studio Digital Extremes. Splash Damage is also currently working with Microsoft on Gears Tactics and Google Stadia on an unannounced project. And it’s that capability to build modern service games for PC that makes Leyou so attractive.