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The9 invests in ailing Red 5 Studios

Former Chinese WoW operator funds two online gaming companies

China's The9 has invested in two online gaming companies - one of which is the US-based Red 5 Studios, a move which was rumoured last month.

According to a source speaking to Reuters, The9 will invest an undisclosed amount into Red 5 and $100 million into the Hangzhou-based developer Fire Rain.

The investments come after The9 lost the licence to operate World of Warcraft in China to NetEase earlier last year.

The company is now reportedly keen to expand its development capacities.

In January, Red 5 Studios confirmed that it was going through a reorganisation process that would result in lay-offs and voluntary departures of staff. It was said that around 30 people were affected by the restructure.

The studio also confirmed that it had taken outside investment from a strategic partner in the online games industry, although that partner wasn't then named.

Red 5 is currently working on an unannounced massively multiplayer online game.