Chinese online game developer and operator The9 has acquired a majority stake in the US-based developer Red 5 Studios.
The two companies today jointly announced the move, which will see The9 invest approximately £20m into Red 5.
Red 5, which was founded by two former Blizzard employees and is currently working on an unannounced MMO game, confirmed a reorganisation in January, which led to staff numbers being reduced by about 30 people.
It was subsequently reported that The9 planned to invest in the developer, alongside a second studio - the Hangzhou-based Fire Rain.
Today, The9 chairman and CEO Jun Zhu said: "Red 5 is a creator of innovative entertainment software, designing games that focus on ease of play and fun. With the acquisition, The9's global strategy is beginning to take shape. It will further enhance our game development capability and diversify our game portfolio and pipeline. I believe our collaboration will create new and exciting entertainment content for people around the world."
"We are very excited to welcome The9 as our key investor and to announce that they are making a commitment to us with the equity infusion," added Mark Kern, CEO of Red 5.
"The investment recognises the hard work of the Red 5 team and the strong potential of the game we are working on, as well as our ability, in the future, to become a multi-game studio.
"By leveraging The9's outstanding expertise in the operation of online games, we will have a great advantage in bringing our games to millions of online gamers around the world. We look forward to a long and fruitful partnership with The9."
The9's investment comes following its loss of the licence to operate World of Warcraft in China to NetEase last year. The company has reportedly since been keen to expand its development capabilities.