This article delves into Google’s ambitious foray into the gaming industry. It highlights Google’s once-proposed plan to partner with Tencent to buy 100% of Epic Games’ shares, which would have considerably bolstered their gaming position.
The desire to gain a footing in the gaming industry led Google to consider some bold and ambitious moves. One such activity was teaming with Tencent, a Chinese tech giant, to buy 100% of Epic Games. This proposal was floated around the Google headquarters not too long ago, driven by the company’s gaming ambitions, particularly Stadia.
Google’s venture into the gaming scene was primarily fueled by Stadia, their now-defunct game streaming platform and storefront. Throughout 2018, Google made quite a splash in the gaming sphere with Stadia, planning to invest more in content infrastructure. Google had initially considered some high-profile deals for Stadia before opening its own first-party labels and enticing third-party publishers.
The Proposal to Buy Epic Games
As revealed in the Epic v Google trial, ex-Stadia lead Phil Harrison had proposed a unique idea – Google allying with Tencent to completely buy Epic Games’ shares. This would have significantly boosted Google’s position in the gaming industry, considering the co-ownership of Fortnite, which was practically the world’s biggest game in 2018. The court case also shed light on Google’s exploration of a potential 20% stake purchase in Epic for $2 billion.
According to email testimonies between Google executives revealed during the court case, detailed ideas and plans for the gaming platform were laid out. In July 2018, Phil Harrison wrote about a potential Epic acquisition or stake purchase, stating the significant business driver Fortnite could be for Google.
Collaboration with Tencent
As part of the discussion, Dav Sobota, who served as director of corporate development at Google from 2008 – 2018, replied with a message that discussed potential plans to team up with Tencent. The project included buying Epic shares from Tencent to gain more control over Epic or joining Tencent to buy 100% of Epic and conducting deep commercial operations with Epic.
Interestingly, Chinese tech giant Tencent currently owns about 40% of Epic Games, with Sony Corp. also having invested to acquire a ~5% stake in the company. Epic has been valued at over $31 billion.
The court case also revealed Google’s 70% operating profit margin on the Google Play Store, primarily driven by in-app purchases across video games and social media platforms. This sheds light on the gaming industry’s considerable impact on Google’s overall operations.
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