MANILA, Philippines - IP E-Game Ventures Inc. and Level Up! Inc. (LUI) have completed the merger of their Philippine online game publishing businesses, a move that will allow them to exploit the growing online gaming market.
E-Games is the listed online gaming unit of IPVG Corp. while LUI is owned by China’s leading Internet services provider, Tencent and Naspers, which owns Multiply.com, and several other online companies around the world.
E-Games said the merger would result in the largest gaming business in the Philippines, accounting for 70 percent of the total market with over 37 million registered users and over five million active users per month.
Users will now have access to a larger catalog of games and an opportunity to interact with larger numbers of social game players.
The deal involved the transfer to LUI of most of E-Games’ titles and assets relating to its game publishing business.
In exchange, E-Games will receive an equity stake in LUI and an undisclosed cash consideration.
Well-known and very successfully published games from the parties include RAN Online, Cabal Online, Ragnarok Online, Rohan Online, Grand Chase Online and the newly launched Bounty Hounds Online.
E-Games and LUI are hoping their different strengths will allow them to form a business which is powerful on every gaming platform and in every territory.
LUI pioneered the online gaming business in the Philippines. Its parent firm Level Up International, has a subsidiary in Brazil, which likewise pioneered and leads the online gaming business there. It also has a joint venture in the US and a user base in India.
E-Games, on the other hand, has aggressively beefed its Internet café network through acquisitions (Netopia and CyBr Cafes).
E-Games said it expects significant synergies and savings from this merger.
Tencent, which posted a $1 billion profit last year, has an option to raise its ownership in Level Up International from 49 percent to 67 percent.
Tencent’s long-term strategy is to cooperate with top Internet companies in emerging markets to fuel growth outside its core online game and online messaging businesses.
While it boasts over 712 million users of its QQ instant messaging service and 540 million users of its Q Zone social network, Tencent has only eight million people playing online games through QQ Game.
Meanwhile, E-Games said unit X-Play Online Games Inc. will remain its game publishing arm, focused on sport genre games and Triple A games from leading developers.