Tencent to help establish Snapchat as games platform
Chinese behemoth believes mobile games will help social media firm meet growth expectations
Snapchat could become a new mobile games destination according to Tencent, which recently acquired a 12% stake in the company.
Last week, Snap Inc - the firm that owns Snapchat - revealed that Tencent had purchased 145.8m of its shares. Reuters reports that the move is being positioned more as an investment rather than the beginning of an acquisition.
Tencent has suggested it will have a close relationship with Snap that will make it more than a passive investor and more of a strategic partner, helping the firm identify new areas of growth. Chief among them will be video games, according to an email statement from Tencent.
"The investment enables Tencent to explore cooperation opportunities with the company on mobile games publishing and newsfeed as well as to share its financial returns from the growth of its businesses and monetisation in the future," the statement read.
Snap has yet to comment on Tencent's suggestion, but analysts believe the Chinese firm's success with mobile games such as Honour of Kings, and how that success has boosted its own social media apps, could prove to be just as applicable to Snapchat.
Tencent's reach in the games industry is extensive to say the least. It has invested in or acquired a myriad of leading firms, ranging from League of Legends developer Riot Games, Clash of Clans studio Supercell, Unreal Engine creator Epic Games and more.
More recently it was revealed the Tencent is likely to be lining up a takeover bid for Bluehole, the Korean developer behind this year's smash hit PlayerUnknown's Battlegrounds.
Snap instigated an IPO back in March, but has since struggled to meet expectations for user growth. It also faces strong competition with Facebook and its subsidiary Instagram, as well other leading social media platforms. As such, it will no doubt be reasonably receptive to suggestions from Tencent and other investors.