Alibaba wants to distribute mobile games

Alibaba has announced the development of its own mobile gaming platform. The new service will compete with WeChat.

Hong Kong-based Tencent dominates the Chinese mobile gaming market thanks to the QQ app store and the WeChat messaging platform. The rapid growth of WeChat (in the first month, the messenger generated $16 million) prompted Alibaba to launch a similar service.

Alibaba is engaged in e-commerce. The company’s annual revenue is $4 billion. Up to $170 billion a year passes through the Taobao and Tmall platforms. Alibaba has positions in cloud computing (Aliyun), online payments (Alipay) and search engines (24% of shares belong to Yahoo!). However, the company has no experience in working with mobile games.

Alibaba is preparing to launch an IPO. Its market value is estimated by experts at $75-125 billion. With such money, the firm will be able to compensate for the lack of knowledge. However, there is a great risk that too conservative shareholders will not allow Alibaba to disperse into different businesses and instead focus on one business line.

The distribution platform for mobile games from Alibaba will work in conjunction with the Laiwang messaging service. The new business is handled by a division headed by a former Tencent manager. A deal with Sina Weibo (a clone of Twitter) and the developers of the UC Browser mobile browser should help in the distribution of the company’s video games.

By the way, the company is going to give 10% of the profits to charity. Developers will receive about 70% of the amount of payments. Alibaba will keep 20%. In WeChat, the commission is less.

Source: http://www.pocketgamer.biz