China's Tencent acquires 12% stake in Snap as shares plunge

Snap Inc said on Wednesday that Chinese tech and media investment firm Tencent Holdings Ltd had taken a 12 per cent stake in the company, a day after the owner of disappearing-messaging app Snapchat was punished by Wall Street for disappointing quarterly results.

Snap's shares fell 16 per cent to $12.67, well below their $17 initial public offering price in March, as investors fretted about Snap's slowing user growth in the latest quarter and viewed Tencent's move as an investment rather than the precursor to a merger.

"(Tencent) buys all sorts of minority investments, and I don't think we can extrapolate that this means they intend to take over the company," said Wedbush Securities analyst Michael Pachter.

Snap said it had only received the details of the stake from Tencent this month. Tencent's 145.8 million class A common shares of Snap, worth about $1.7 billion at Wednesday's price, give the Chinese company no voting rights.

Tencent president Martin Lau told Snap his firm is "excited" to deepen its relationship with the firm, Snap said in a regulatory filing. A Snap spokesman declined to comment further.

The Chinese tech company, which owns mobile chat service WeChat, has bought stakes in several companies over the past few years, including electric car maker Tesla Inc and ride services company Lyft Inc. In 2013 it invested in Snap through an affiliate.
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China targets King of Glory game for deliberately mocking its history

Chinese Internet giant Tencent startled users — and stockholders — this week when it set new age requirements for several of its online games, including King of Glory.

Tencent’s new policy restricts players under 12 from playing for more one hour each day, and older teens from playing for more than two hours each day. The company has also increased parental controls and improved the game's identity verification system.

The new policy is a response to government concerns about gaming addiction, and comes at significant financial risk for the company — the multi-player battle game has more than 200 million registered players, 20 percent of whom are under 17 years old.

But Chinese Communist Party media and commentators have objections to the game that go beyond its supposedly addictive nature. They are concerned about the game's storyline, which they say “subverts Chinese history.”

A July 3 editorial in the Chinese Communist Party-controlled People’s Daily newspaper called the new policy “inadequate” and called for heavier censorship.

The People Daily's piece in March quoted a history scholar who argued that the game is effectively “cutting off the bloodline” of Chinese culture:

“If we deliberately narrate history in a playful or mocking manner, it is equal to abandoning historical cultural tradition, a cutting off the bloodline of our national culture, which will result in the loss of our cultural direction and goal.”

This critique of historical nihilism has been a major points of ideological contention since 2012. Any historical interpretations and literary works that deviate from the CCP's interpretations are viewed as distortion or subversion of history.
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China's Tencent seals exclusive music licensing deal with music firm UMG

Tencent Holdings, China's biggest gaming and social media firm, has reached a deal with US music firm Universal Music Group (UMG) to distribute licensed content in China.

Tencent Music Entertainment Group, the Chinese firm's music subsidiary, will also own exclusive rights to sub-license UMG's content to other content providers in China, the two firms said in a statement on Tuesday.

"The digital opportunity in China's music market is truly extraordinary, with over half a billion people enabled with smart phones. Our expansive new partnership with Tencent will enable UMG to fully address this opportunity," said Michael Nash, UMG Executive Vice President of Digital Strategy.

Last year Tencent and leading Chinese music-streaming company China Music Corporation struck a deal to combine their music businesses under a new venture valued at roughly $6 billion.

In 2015 Germany's BMG music rights company reached an agreement with Tencent rival Alibaba Group Holding Ltd to license 2.5 million copyrights in the Chinese market.

But despite the wide proliferation of streaming sites, China's local music industry is still in its nascent stage compared with neighbours Japan and South Korea, and subscription services are still less developed.

In 2015 the country said it was targeting a music industry output of $47 billion by 2020. According to research firm IFIR, China's music industry was worth $170 million in 2015.

The growth in China's online entertainment industry has also attracted the scrutiny of regulators, who have clamped down on unsanctioned music, films and livestreaming services in a wide-reaching censorship campaign which they say is designed to protect the country's minors and maintain political stability.

Tencent's music unit, which has over 600 million monthly active users and 15 million paying subscribers, oversees music services QQ Music, KuGou and Kuwo.

It will also work with UMG to build a recording studio "inspired" by the famous UMG Abbey Road studio in London, it said.
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