According to Niko Partners, Sony is looking to strengthen its position in the Chinese market.
Sony has presented a $400 million investment to BiliBili, a China-based entertainment platform that specializes in livestreaming, esports, music videos, and mobile gaming. The deal, according to a press release, sees Sony receiving more than 17 million Class Z shares in Bilibili, valued at just over $23 per share.
“We are excited to partner with Sony, the world’s leader in entertainment and technology,” Rui Chen, CEO of Bilibili, said in a press release. “The strategic investment and business cooperation further align our goals to bring best-in-class content offerings and services to our users, as we increase our domestic stronghold in animation and mobile games. We look forward to joining efforts on a broader scale to fulfill the tremendous and growing entertainment needs in China.”
For Niko Partners, a games industry analyst group that focuses on the Asian markets, this investment represents the next step in the business relationship between Sony and Bilibili.
“The investment follows a previous partnership between Bilibili and Sony Music to bring music and videos to the platform in China,” Lisa Hanson, analyst at Niko, told GameDaily. “Bilibili is also the publisher for Fate/Grand Order in China, a popular RPG game that is developed by Aniplex, [who is owned by] Sony Music. Sony also has a number of animation companies such as Funimation who fit with Bilibili’s audience.”
According to Reuters, Bilibili averages 130 million active users a month, with the vast majority being a part of Gen Z. By further investing in Bilibili, Sony appears to be making a larger play for younger audiences. It also reinforces Sony’s commitment to growing its market share in China.
“China is a strategic region for Sony’s entertainment business, and Bilibili operates a platform that reaches 130 million monthly active users,” Hanson said. “Billbili users skew younger, with 80% classified as Gen Z. They are also big fans of anime, comics, and games. There could be several positive outcomes for Sony from this investment.”
For Bilibili, Sony’s investment could be viewed as an opportunity to increase its foothold in the esports scene. Last year, the streaming platform managed to snag the Chinese broadcasting rights for the League of Legends World Championship over the next three years. Reportedly, Bilibili outbid competing platforms Douyu, Huya, and Kuaishou for the rights. Esports Insider notes that this is the first instance of a bidding process for esports broadcasting rights in China.
“Sony believes China is a key strategic region in the entertainment business, and this investment in Bilibili is in line with Sony's strategy,” Sony said in a press release. “Additionally, Sony and Bilibili have entered into a Business Collaboration Agreement, pursuant to which the parties agreed to pursue collaboration opportunities in the entertainment field in China, including animation and mobile game apps.”
This week, Niko Partners noted that Douyu is China’s most popular streaming platform. Niko also points out that mobile gaming is far more popular in Asia than it is in the west, with Honor of Kings nabbing the top spot on Douyu’s most-watched games list last month. By snagging a cool $400 million from Sony, Billibilli appears to be gaining some ground in that competition.
As the largest games market in the world, Asia is an attractive prospect for many major industry leaders. Sony is already a primary player in this regard, so its investment in Bilibili is mostly a means to strengthen its position there. With the coronavirus impacting global markets, the business move is also timely, as more and more people are turning to livestreaming as a primary form of entertainment.
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