Leyou Technologies Holdings Limited ( zh, 樂遊科技控股有限公司;
formerly Sumpo Food Holdings Limited) is a Chinese video game
holding company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
based at
Lippo Centre
Lippo Group is an Indonesian multinational conglomerate company. The company operates internationally providing property development and management services. It was founded by Mochtar Riady. Lippo has a collective presence across Asia and Nor ...
,
Admiralty
Admiralty most often refers to:
*Admiralty, Hong Kong
*Admiralty (United Kingdom), military department in command of the Royal Navy from 1707 to 1964
*The rank of admiral
*Admiralty law
Admiralty can also refer to:
Buildings
* Admiralty, Traf ...
,
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
.
Founded in 2010, the company originally dealt with
poultry
Poultry () are domesticated birds kept by humans for their eggs, their meat or their feathers. These birds are most typically members of the superorder Galloanserae (fowl), especially the order Galliformes (which includes chickens, quails, a ...
through its subsidiary Fujian Sumpo, which had been founded in 1998. After floating on the
Hong Kong Stock Exchange
The Stock Exchange of Hong Kong (SEHK, also known as Hong Kong Stock Exchange) is a stock exchange based in Hong Kong. As of the end of 2020, it has 2,538 listed companies with a combined market capitalization of HK$47 trillion. It is repor ...
in January 2011, poultry-based income started to fall in 2013. It agreed to buy a majority stake in the video game developer
Digital Extremes
Digital Extremes is a Canadian video game developer founded in 1993 by James Schmalz. They are best known for creating ''Warframe'', a free-to-play cooperative online action game, and co-creating Epic Games' ''Unreal'' series of games. Digita ...
in October 2014, renamed itself Leyou in January 2015, and completed the acquisition later that year. It acquired
Splash Damage
Splash Damage Ltd. is a British video game developer specialising in multiplayer first-person shooter video games. The studio is best known as the creators of '' Wolfenstein: Enemy Territory'' and '' Enemy Territory: Quake Wars''.
History
...
in July 2016 before divesting its poultry business in August, majority-acquired Radiance Games, and invested in
Certain Affinity
Certain Affinity is an American video game development studio based in Austin, Texas. It was founded in 2006 by Max Hoberman and a small number of other ex-Bungie employees and other industry veterans.
History
Certain Affinity's creation was a ...
in 2017, and established
Athlon Games in 2018. In December 2020, Leyou was acquired by
Tencent
Tencent Holdings Ltd. () is a Chinese multinational technology and entertainment conglomerate and holding company headquartered in Shenzhen. It is one of the highest grossing multimedia companies in the world based on revenue. It is also the w ...
.
History
Background in poultry (1998–2011)
Lin Qinglin founded and became the
general manager
A general manager (GM) is an executive who has overall responsibility for managing both the revenue and cost elements of a company's income statement, known as profit & loss (P&L) responsibility. A general manager usually oversees most or all of ...
of Xiamen Xian Wu Modern Office Facilities Operation Company in January 1985 and served until June 1998. The company acted as an agent for
fax machine
Fax (short for facsimile), sometimes called telecopying or telefax (the latter short for telefacsimile), is the telephonic transmission of scanned printed material (both text and images), normally to a telephone number connected to a printer o ...
s manufactured by
Panasonic
formerly between 1935 and 2008 and the first incarnation of between 2008 and 2022, is a major Japanese multinational corporation, multinational Conglomerate (company), conglomerate corporation, headquartered in Kadoma, Osaka, Kadoma, Osaka P ...
. During the late 1990s, the
Longyan
Longyan (; Hakka: ''Liùng-ngàm''; Longyan dialect: ''Lengngia'') is a prefecture-level city in south-western Fujian Province, China, bordering Guangdong to the south and Jiangxi to the west.
History
In 736 AD, (the Tang dynasty), the prefect ...
local government encouraged investments in chicken processing operations. Lin had already opened a food shop in
Xiamen
Xiamen ( , ; ), also known as Amoy (, from Hokkien pronunciation ), is a sub-provincial city in southeastern Fujian, People's Republic of China, beside the Taiwan Strait. It is divided into six districts: Huli, Siming, Jimei, Tong'an, ...
, which he incorporated as Xiamen Sumpo Group Limited in June 1998. Using the profits from his previous venture, he established the meat production company Sumpo (Longyan) Industrial Co. Ltd. in Longyan in September. Lin oversaw the latter's main business, which dealt with chicken products, animal feed, and chicken seedlings. Among the company's clients were
McDonald's
McDonald's Corporation is an American Multinational corporation, multinational fast food chain store, chain, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechri ...
,
KFC
KFC (Kentucky Fried Chicken) is an American fast food restaurant chain headquartered in Louisville, Kentucky, that specializes in fried chicken. It is the world's second-largest restaurant chain (as measured by sales) after McDonald's, with 2 ...
, and
Dicos
Dicos (stylized as dico͘s, ) is a Chinese fast-food restaurant chain owned by the Tianjin Ding Qiao Food Service. The chain ranks third among China's top three fast-food enterprises, as it has almost as many restaurants as McDonald's. The chain ...
in
mainland China
"Mainland China" is a geopolitical term defined as the territory governed by the People's Republic of China (including islands like Hainan or Chongming), excluding dependent territories of the PRC, and other territories within Greater China. ...
. Lin stepped down as the
chairman
The chairperson, also chairman, chairwoman or chair, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the grou ...
of Sumpo (Longyan) Industrial in March 2003 to focus on the operations of Xiamen Sumpo. His brother, Lin Qingrong, replaced him at Sumpo (Longyan) Industrial, which was renamed Fujian Sumpo Foods Holdings Co., Ltd. in January 2007. In July of that year, Lin Qingrong's Longyan Investment acquired 10% of the company and Lin Qinglin re-assumed its chairman position, which became his primary focus. Subsequently, the company underwent a corporate reorganisation and evolved into a large food processing business, producing 10,000 tons of meat and 180,000 tons of "Sumpo"-branded seed annually. It had a net profit of in 2009.
On 22 February 2010, Sumpo Food Holdings Limited was incorporated as a
holding company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
in the
Cayman Islands
The Cayman Islands () is a self-governing British Overseas Territory—the largest by population in the western Caribbean Sea. The territory comprises the three islands of Grand Cayman, Cayman Brac and Little Cayman, which are located to the ...
, acquiring the outstanding 90% of Fujian Sumpo. It completed an
initial public offering
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
on the
Hong Kong Stock Exchange
The Stock Exchange of Hong Kong (SEHK, also known as Hong Kong Stock Exchange) is a stock exchange based in Hong Kong. As of the end of 2020, it has 2,538 listed companies with a combined market capitalization of HK$47 trillion. It is repor ...
in January 2011 at an issue price of per share. Lin Qinglin, serving as the company's chairman and
chief executive officer
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
(CEO), was the principal shareholder at 642 million shares, while his son, Lin Genghua, owned another 167 million. The combined 809 million shares were worth .
Entry into video games (2013–2015)
Due to increased competition in the animal breeding industry, Sumpo Food Holdings started continuously losing money from 2013. To diversify its business, the company aimed at entering the
video game industry
The video game industry encompasses the development, marketing, and monetization of video games. The industry encompasses dozens of job disciplines and thousands of jobs worldwide.
The video game industry has grown from niches to mainstream. , ...
. Initially, it attempted to acquire an undisclosed Japanese developer, speculated to be
SNK
is a Japanese video game hardware and software company. It is the successor to the company Shin Nihon Kikaku and presently owns the SNK video game brand and the Neo Geo video game platform. SNK's predecessor Shin Nihon Kikaku was founded in 1978 ...
, but was unsuccessful.
According to Alex Xu, the
chief business officer of the video game company
Perfect World, Sumpo Food Holdings was "almost out of business" in early 2014. At the same time, Perfect World was cooperating with and seeking to acquire
Digital Extremes
Digital Extremes is a Canadian video game developer founded in 1993 by James Schmalz. They are best known for creating ''Warframe'', a free-to-play cooperative online action game, and co-creating Epic Games' ''Unreal'' series of games. Digita ...
, a Canadian
video game developer
A video game developer is a broad term for a software developer specializing in video game development – the process and related disciplines of creating video games. A game developer can range from one person who undertakes all tasks to a large ...
. However, Perfect World was considering delisting itself from the
Nasdaq
The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
and wanted to avoid pursuing an acquisition using internal funding. At Xu's behest, the company
leveraged
In finance, leverage (or gearing in the United Kingdom and Australia) is any technique involving borrowing funds to buy things, hoping that future profits will be many times more than the cost of borrowing. This technique is named after a lever ...
Sumpo Food Holdings to incrementally acquire Digital Extremes.
This move was announced in October 2014, with Sumpo Food Holdings to acquire a 58% stake, while another 3% would be sold to Perfect Online, a
subsidiary
A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a s ...
of Perfect World. The total price for both stakes was .
In January 2015, Sumpo Food Holdings changed its name to Leyou Technologies Holdings Limited.
The acquisition of Digital Extreme's shares was completed in July 2015.
By the end of that year, 70% of Leyou's gross profit was generated by its games business, despite 80% of all revenue being generated by its poultry business.
The company acquired the remaining 39% in Digital Extremes in May 2016 for .
In July 2016, via its UK subsidiary Radius Maxima, Leyou acquired three companies: The developer
Splash Damage
Splash Damage Ltd. is a British video game developer specialising in multiplayer first-person shooter video games. The studio is best known as the creators of '' Wolfenstein: Enemy Territory'' and '' Enemy Territory: Quake Wars''.
History
...
, online back-end technology company Fireteam, and online multiplayer publisher WarChest. All three were previously solely owned by their founder and CEO,
Paul Wedgwood
Paul Wedgwood (born June 1970) is one of three founders of video game developer Splash Damage and was the CEO of the company until end of 2018.
Career
Paul Wedgwood was born in June 1970. Wedgwood started his career in the early 1990s as a netwo ...
.
Exit from poultry and acquisition by Tencent (2016–present)
During 2016, Perfect World attempted to acquire Leyou, but the deal fell through due to "some difficulties".
Leyou divested its entire poultry business in August that year, selling it to Lin Qinglin's wife for .
CP Pokphand Co., which was majority-owned by the Thai food company
Charoen Pokphand Foods
Charoen Pokphand Foods Public Company Limited, a company of the Charoen Pokphand Group, is an agro-industrial and food conglomerate headquartered in Thailand. It is the world's largest producer of feed and shrimp, and is also a global top three p ...
, subsequently acquired 70% of Fujian Sumpo in October 2016 for . The previous
fiscal year
A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...
, Fujian Sumpo had revenues of but made a net loss of .
By 2017, the majority of Leyou's shares had been bought out by a private investor. Xu, who had since left Perfect World for
Qihoo 360
Qihoo 360 (; approximate pronunciation CHEE-hoo), full name 360 Security Technology Inc., is a Chinese internet security company that has developed the antivirus software programs 360 Safeguard and 360 Mobile Safe, the Web browser 360 Secure Bro ...
, was subsequently hired as Leyou's CEO in July 2017.
In July 2017, Leyou invested into Chinese developer Guangzhou Radiance Software Technology Co. Ltd. (Radiance Games) to acquire 51% of the company.
It announced a investment in the American developer
Certain Affinity
Certain Affinity is an American video game development studio based in Austin, Texas. It was founded in 2006 by Max Hoberman and a small number of other ex-Bungie employees and other industry veterans.
History
Certain Affinity's creation was a ...
in October, gaining a 20% stake.
Leyou launched a
publisher
Publishing is the activity of making information, literature, music, software and other content available to the public for sale or for free. Traditionally, the term refers to the creation and distribution of printed works, such as books, newsp ...
,
Athlon Games, in
California
California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...
in May 2018.
In September that year, Athlon Games and
Middle-earth Enterprises
Middle-earth Enterprises, formerly known as Tolkien Enterprises, is a subdivision of the Embracer Freemode division of Embracer Group and formerly a trade name for a division of The Saul Zaentz Company. The subdivision owns the worldwide exclusiv ...
agreed for the former to publish a multi-year, online
free-to-play
Free-to-play (F2P or FtP) video games are games that give players access to a significant portion of their content without paying or do not require paying to continue playing. Free-to-play is distinct from traditional commercial software, which ...
game based on ''
The Lord of the Rings
''The Lord of the Rings'' is an epic high-fantasy novel by English author and scholar J. R. R. Tolkien. Set in Middle-earth, intended to be Earth at some time in the distant past, the story began as a sequel to Tolkien's 1937 children's boo ...
''.
Amazon
Amazon most often refers to:
* Amazons, a tribe of female warriors in Greek mythology
* Amazon rainforest, a rainforest covering most of the Amazon basin
* Amazon River, in South America
* Amazon (company), an American multinational technology c ...
(through its
Amazon Game Studios
Amazon Games (formerly Amazon Game Studios) is an American video game company and division of the online retailing company Amazon that primarily focuses on publishing video games developed within the company's development divisions.
History
I ...
unit) joined the project in July 2019, agreeing to co-develop and publish the game worldwide, while Leyou would publish it in China and Taiwan.
Later that year, Athlon Games became the publisher of ''
Samurai Shodown
''Samurai Shodown'', known in Japan as is a fighting game series by SNK. The series began in 1993 and is known for being one of the earliest in the genre with a primary focus on weapon-based combat.
Plot
The stories in the series take place in ...
'' and a shareholder and publishing partner of
LCG Entertainment, which acquired the assets of the defunct
Telltale Games
Telltale Incorporated (trade name: Telltale Games) was an American video game developer based in San Rafael, California. The company was founded in July 2004 by former LucasArts developers Kevin Bruner, Dan Connors and Troy Molander, following ...
.
In 2019, Leyou was reported to be seeking a buyer. iDreamSky (which was 18.6%-owned by the conglomerate
Tencent
Tencent Holdings Ltd. () is a Chinese multinational technology and entertainment conglomerate and holding company headquartered in Shenzhen. It is one of the highest grossing multimedia companies in the world based on revenue. It is also the w ...
) and
CVC Capital Partners
CVC Capital Partners is a Luxembourg-based French private equity and investment advisory firm with approximately US$133 billion of assets under management and approximately €157 billion in secured commitments since inception across American, E ...
offered to acquire Leyou, but the talks stalled due to the
COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identif ...
.
iDreamSky was met with a competing offer from Zhejiang Century Huatong, which entered into a non-binding merger agreement with Leyou in May 2020.
''
Bloomberg News
Bloomberg News (originally Bloomberg Business News) is an international news agency headquartered in New York City and a division of Bloomberg L.P. Content produced by Bloomberg News is disseminated through Bloomberg Terminals, Bloomberg Televi ...
'' reported that
Sony
, commonly stylized as SONY, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan. As a major technology company, it operates as one of the world's largest manufacturers of consumer and professional ...
and Tencent were also interested in bidding for Leyou as of July 2020.
By August that year, Tencent appeared to be close to signing a deal to acquire Leyou.
The Tencent deal was confirmed by Leyou's shareholders by 11 December 2020 and completed on 23 December 2020. Under the agreement, Tencent fully acquired the firm through its subsidiary Image Frame Investment.
A dispute between Tencent and Amazon during contract negotiations for the planned ''The Lord of the Rings'' game led Amazon to cancel the game's development in April 2021.
The acquisition further caused an exodus of Leyou employees, particularly at the
Beijing
}
Beijing ( ; ; ), alternatively romanized as Peking ( ), is the capital of the People's Republic of China. It is the center of power and development of the country. Beijing is the world's most populous national capital city, with over 21 ...
and
Shanghai
Shanghai (; , , Standard Mandarin pronunciation: ) is one of the four direct-administered municipalities of the People's Republic of China (PRC). The city is located on the southern estuary of the Yangtze River, with the Huangpu River flow ...
offices. Among them, Xu left in April 2021.
References
{{Authority control
2010 establishments in Hong Kong
2020 mergers and acquisitions
Chinese companies established in 2010
Entertainment companies of Hong Kong
Holding companies established in 2010
Holding companies of Hong Kong
Tencent divisions and subsidiaries
Video game companies established in 2010
Video game companies of China
Video game development companies