Biz / Tech

iQiyi acquires gaming firm for US$300m

The online video platform – dubbed China's Netflix – is acquiring Chengdu-based Skymoons Technology as part of its diversification plans.

China's Nasdaq-listed iQiyi, an online video platform, said yesterday it was paying 2 billion yuan (US$300 million) to acquire Chengdu-based game developer Skymoons Technology as the Beijing-headquartered company diversifies its business.

iQiyi, which issued an IPO on the Nasdaq to raise US$2.25 billion in March, plans to establish a digital entertainment empire through expansion and technology upgrades, including gaming, virtual reality and artificial intelligence, the company said recently.

IQiyi's chief executive officer, Yu Gong, said the Skymoons deal would broaden the platform's "offering of entertainment content across multiple formats" and help create more ways to monetize its intellectual property.

"We believe Skymoons is a natural extension to our business and will strengthen iQiyi's media platform and our overall ecosystem," he said.

The deal includes a fixed payment of 1.27 billion yuan and additional 730 million yuan over the next two years, if Skymoons meets certain benchmarks.

iQiyi — dubbed China's Netflix and some of whose dramas are distributed through Netflix — faces fierce competition with Tencent’s online video business and the Alibaba-backed Youku Tudou.

Online video services are the darling of investors due to their growth potential as China moves towards a consumption-driven growth.

Meanwhile, iQiyi is cooperating with e-commerce giant to jointly market an annually-paid subscription service, similar to the Amazon Prime video and music subscription service, combining iQiyi’s paid online content and JD’s reach.

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