NetEase is known for bringing the global title Overwatch to China’s gamers The Chinese firm is in the unique position of owning and backing signature titles such as League of Legends and Fortnite, plus a distribution channel anchored by its billion-plus WeChat users.
NetEase said it’s investing US$50 million into Improbable. The Beijing-based company is also buying a similar amount of stock from shareholders, according to a person familiar with the matter. The investment values Improbable at about $2 billion, said another person.
Both people asked not to be identified because the terms are private. Improbable’s SpatialOS software is designed to let programmers create realistic simulations at a massive scale and run them on a cloud-computing network. SoftBank Group Corp. acquired a non-controlling stake in Improbable for $502 million just over a year ago in a deal that valued the company at more than $1 billion.
NetEase, listed in the US with a market value of $35 billion, is one of China’s largest video game publishers, known for bringing the global title Overwatch to its local market. The company’s Kaola e-commerce business is one of the biggest in China’s cross-border online shopping industry.
Improbable’s software powers virtual worlds for massively multiplayer online games, including Bossa Studios’ Worlds Adrift and Spilt Milk Studios’ Lazarus. NetEase is also set to launch a game using Improbable’s SpatialOS platform this year. But Improbable’s software is not just used for gaming.
The start-up has strong links with governments for helping build simulations of complex, real-world environments like those in large-scale war games. In early 2016, UK officials used SpatialOS to simulate every node on the internet to see what would happen to network traffic in a large cyberattack or a natural disaster. Improbable hopes its new deal with NetEase will allow it to forge more partnerships in China.
Peter Lipka, Improbable’s co-founder and chief operational officer, is moving to the country later this year to build up the company’s presence there. The start-up is also assembling a team in Washington to support its work with the US government, according to a person familiar with the effort.
Source: South China Morning Post