The Chengdu B-ray Media Co, a major media company in western China, plans to venture into the field of mobile gaming - an emerging and rapidly growing market in not only China but the world.
B-ray Media announced in a filing with the Shanghai Stock Exchange over the weekend that it plans to completely buy out the Shanghai Chenyan Information Technology Co, a software developer with mobile games available in Apple's App Store.
B-ray Media said it would offer between $12 million and $40 million for the acquisition.
Analysts said the deal will help B-ray Media gain a foothold in the domestic mobile-gaming market, which is believed to have great growth potential.
"Though not named on the top-10 list, Chenyan has done pretty good in the field of game developing on the App Store, ensuring future growth. B-ray Media could bank on the acquisition to extend its reach into the mobile-gaming market," said Hu Zhihui, an analyst with market research firm Analysys International.
The price offer, however, is below average, according to Zheng Jiyou, an industry analyst with Huarong Securities in Beijing.
The App Store is the largest and still the most rapidly growing mobile-applications platform in the world, and content providers with a presence in the store are expected to face huge developing opportunities, B-ray Media said in its filing.
Chenyan achieved a net profit of 185,300 yuan ($27,939.03) in the first 11 months of the year, according to the filing.
Currently, Chenyan targets mainly the US and European market, with US users accounting for roughly 57 percent of sales, British users 11 percent, and domestic users less than 1 percent. Prior to its newest offer, B-ray Media made several acquisitions to penetrate the online gaming market based on PCs.
Market watchers believe the mobile-gaming market has great growth potential. However, the business model in the market remains unclear at the moment, even though its growth potential is huge, Zheng at Huarong Securities said.
