The9 lines up $24m investment in Red 5
Deal with Oriental pearl values Firefall at $100 million
Red 5 Studios' parent company, The9, intends to issue around $24 million in common stock to Shanghai Oriental Pearl Culture Development Ltd.
The deal is still in a preliminary, non-binding stage, but if it is approved Oriental Pearl - a Chinese culture and entertainment development outfit - will become one of Red 5's leading minority shareholders with a 20 per cent stake in the company.
The value of the shares is based on a pre-money valuation of Red 5's forthcoming online shooter, Firefall. According to a statement released today, Firefall is valued at $100 million.
The9 acquired a majority stake in Red 5 Studios - founded in 2005 by former Blizzard staff - in March 2010. The company announced Firefall in September 2010, but the game only entered open beta in July this year.
Red 5 recently laid off 10 per cent of its workforce. The redundancies were attributed to an internal reorganisation as Firefall moved towards its full release.
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