While Tencent has become known for a diversity of investments in non-Chinese game companies, its latest investment may come as a surprise, as it has led a $10m investment round into UK-based gaming business Quell.
Quell is a company which develops fitness equipment, their flagship device being the Impact, a set of handheld peripherals that allow users to play games that synchronise with their movements. Think of the Nintendo Wii, or Xbox Kinect, only as a standalone unit featuring additional equipment such as resistance bands.
The firm raised approximately $10m in a Series A funding round, led by Tencent, with other investors including Khosla Ventures and Heartcore Capital.
Chief European Representative at Tencent, Dr Ling Ge, said of the investment “Tencent is delighted to support Quell as it looks to bring the future of fitness to consumers globally. Until now, fitness gaming was an undeveloped sector, providing either a great gaming or fitness experience, but never both. Quell’s Impact device solves this problem – by refusing to sacrifice entertainment or exercise, it provides a consistently entertaining, exhilarating home fitness experience. We’re confident Quell will drive fitness gaming to the mainstream and are proud to support them as they work towards their global launch this year.”
As we’ve observed previously, many of Tencent’s recent investments and moves as 2023 gears up have pointed to an increased diversification of their revenue streams. This investment outside of China looks likely to continue as regulation continues to impact profits at home.
As China’s economy is no longer seen as the untouchable juggernaut it once was, it makes sense that companies with cash to spare such as Tencent are putting money into a greater variety of businesses. While Quell is not a major break from their formula of video game investment, it does further indicate an interest beyond console and PC where they have previously made overtures.
The recent release of previously Chinese exclusive games, such as Devil May Cry: Peak of Combat and Street Fighter: Duel indicates an increased focus on non-Chinese markets as a new, more stable source of income for Tencent.