Unity Software Inc, the US developer whose software is used in video games like Tencent Holdings’ Honor of Kings, said on Tuesday it had reached an agreement to create a joint venture with multiple partners valued at $1 billion (approximately Rs. 7,900 crore), from its China business.
The announcement follows an exclusive report from Reuters last week that Unity was in talks to spin off its Chinese unit to help it expand into the world’s biggest games market.
Joint venture partners include Alibaba, China Mobile, Oppo, ByteDance’s Douyin, PCI Technology and G-Bits Network Technology Xiamen, Unity said in a statement on its official WeChat account.
The company will retain majority ownership and control of the Chinese joint venture, Unity said.
The joint venture, named Unity China, will soon begin creating local custom versions of its core products for game developers and will become the exclusive distributor of Unity’s products and services in China, according to the release.
Unity entered China in 2012 and its eponymous software, known as the game engine, powers many of the country’s most popular games, including miHoYo’s Genshin Impact.
Last week, Reuters reported that Unity was in talks to spin off its China unit to help it expand into the world’s biggest games market.
The talks came as strained US-China relations heighten sensitivities over technology transfer and data processing across borders, prompting tech companies to re-evaluate their operations in China.
At the same time, there is growing interest in extending game creation software to new technologies such as the so-called Metaverse, an immersive three-dimensional Internet.
Unity entered China in 2012 and its eponymous software, known as the game engine, powers many of the country’s most popular games, such as gaming leader Tencent’s Honor of Kings and Genshin Impact. Rivals include Epic Games, backed by Tencent, the US developer of the increasingly popular Unreal Engine 5.
© Thomson Reuters 2022