Tencent Buys Warframe

Automatic TRANSCRIPT

The first here is from the motley fool and the headline tencent makes another billion dollar gaming acquisition. The chinese technology and media conglomerate has been on an acquisition spree in the gaming space making its leadership position even stronger What they bought here was Lay you lay you technologies. Which is the parent company of digital extremes And it's a canadian. Based video game studio known for war frame they also own studios including athlon and splash damage. Ten sense going to be paying roughly one and a half billion in cash Choir the company which is incredible The buying spree that they've been on the amount of cash that they've put out there the second acquisition this one I think we talked about it on a previous podcast And it was a agrees to a us. One point two billion dollar deal for f one video game developer code masters. I think when we talked about it we were talking about it in the context of take two interactive having made an offer and ea sort of just trump them. The came came up with an offer for about two hundred or two hundred and fifty million dollars more so they were willing to pay a higher Share price 'cause code masters is publicly traded. And so it looks like ea is going to end up acquiring code masters having outbid take two interactive. Which i think at the time when we talked about it we felt that was a big price. Tag billion dollars for code masters and now the looks like the trading price is going to be one point. Two billion so curious to get your guys thought You know we can talk about them individually or we can talk about sort of which one we think is the better acquisition Neil i don't know if you know the war frame guys. I know it is canadian based a candidate based But curious to get your thoughts on these two. My i take is. I know you guys are fans of this gentleman. But jeff bezos when you look at code masters being bought yeah code about being bought for one point two billion. Let's just taking kids that are issued. How amazing that twitch nine hundred seventy six years ago right on decide to eight point. Nine children should win. Ea i think is in such a good spot and we might say openly. Here that one would you billionaires demo overpaying if you look at the stock run that they've been onto it's a currency unto itself and there probably sixty seventy percent on the year and adding more aaa titles to their. Snow is all the better. I think they've just done a tremendous job in and similar racing at f. One especially with what we saw as a result of that netflix series drug survive and get him is f. One is making a huge comeback younger audiences and people that have now seen this through netflix. And then people that are you know. Middle aged or know mid thirties to my age is. We're all obsessed and we're following it every week and it's quite dramatic as i didn't care about f. one at all in the last couple of years. But i'll admit. I've i've in the playstation store i've bought the f. one game it's not that great in my opinion maybe not that good at driving it but i think the acquisition is worth the risk. You want to be known as as a world class when it comes to fee for Nhl sim racing. They've got such great titles along the way and you know the team over there in teams doing it competitive gaming entertainment now. They're just making the right most. I don't know much about this. Said deal admittedly But anything tencent touches It's a powerful move and they're building empire that we should be very very afraid of. I mean both seem like really good acquisitions from synergies perspective right because ea has all the sports titles so f one feels like a perfect fit and and ten cents graded monetization right. Probably better than anyone and wore. Frame really is one of these free to play like monetize. Every which way up the wazoo kind of games like it's in the ten cent portfolio both of these acquisitions. I have to tell you like in a vacuum. I thought they were already owned by the people. Buying them like no joke. Like i literally thought were frame was somehow i was like. That's just the sort of thing they buy and the same for ea. Like i literally thought. Like i played grid quite a lot in my memory. Brid was an ea game like it was published by ears. I don't know. But like i just that tells you how lake like well on portfolio on message these acquisitions. Our prices are high. But as neil said like the market tie and then took to other point as well you know putting in context of bazo acquisition. Like doesn't matter where you put money and put it games like i think anything that was bought for a billion dollars a couple years ago smart because there were a couple wasn't just twitch we had minecraft myra look in a world where roadblocks goes public at thirty billion or forty billion market cap like buying minecraft at four or five or whatever they paid right seems like house. Yeah just like microsoft like so like the bottom line is but guises whiting. Listen to this podcast. It's so important. It's just like this is not the exception. This is the norm putting money in games today will turn into more money later. More likely than not investment advice aside. I'm not a credit above because the industry is just so positioned. It's the future of so much entertainment media and everything so like the reason. We're observing these crazy exits and outcomes is because the space is a whole is growing so much right so lake. Get into the space. That's the bottom line william. I'm with you on that. A hundred thousand percent. And i think the interesting thing is re that are in the industry. we talk with these things very openly. We discuss them. But from an outside portfolio manager at a morgan stanley wherever they probably are afraid

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