Alibaba investing $145m in global network for mobile games

Chinese online giant forms "Global Strategic Alliance of Game Distribution" with four international companies

Alibaba has pledged to invest 1 billion ($145 million) to create a global distribution ecosystem for mobile games, perhaps the boldest step into the game business from the Chinese online retail giant to date.

At a press conference in Beijing yesterday, Simon Shi, president of Alibaba Games, detailed what the company has named the "Global Strategic Alliance of Game Distribution." Essentially, it's a series of partnerships with companies across the world: Group, TFJoy, Efun and ONEMT are those named so far.

"The association aims at bridging the mobile games distribution between China and Russia, Europe, Japan, Middle East and the US, and provide upgraded gaming experience to local users," the company said in a statement.

Shi described the evolution of mobile games markets across the world as "uneven," with Europe, America, Japanese and South Korea regarded as mature, while South America, the Middle East and SE Asia still emerging. "We are doing very well in emerging markets like India and Indonesia already," he said.

Alibaba has designs on each of these markets, and it is prepared to bring the full breadth of its huge organisation to bear. It will use "big data" to improve the accuracy of distribution and recommendations, and Xiaopeng He, president of Alibaba's Mobile Business Group, said that it could "maximise the value" of game IP distributed in its network by integrating resources and data from divisions like the video streaming platform Youku, Alibaba Pictures, Alibaba Literature and UCWeb, which makes a popular browser with 420 million MAUs.

"UCWeb, with its massive traffic entry globally, will play a significant role in the distribution of Alibaba Games," Xiaopeng He said

With this new network, Alibaba will be able to distribute Chinese games globally, but this move also provides a potential new route into China for international developers, providing instant and estimable competition for companies like Tencent and NetEase.

Alibaba has been moving into the games business for several years already, mostly in the form of investments: $120 million in Kabam in July 2014, $10 million in Ouya in January 2015, leading a huge funding round for Magic Leap in February 2016, and bankrolling hundreds of eSports events across China since April 2016.

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