Chinese tech firm Alibaba (BABA) is again branching out in the digital arena — this time, getting into mobile game distribution.
The company is investing 1 billion yuan in an alliance with a handful of other mobile gaming firms to distribute offerings between China and other parts of the world.
Getting mobile games in front of players can be a challenge when it comes to China. Developers must seek approval from government censors before games can be published for users to download. Media and information remains tightly restricted, and the government routinely blocks news and social media sites online. Plus, games distributed to other countries need to be translated to the local language.
Alibaba's investment is an attempt to bridge that gap, and is its latest move to diversify beyond its original offering as an e-commerce firm — the Hangzhou-based company is now doing everything from making movies to dabbling in mobile payments.
The company is also planning to use big data to make smarter recommendations to users regarding what games to download. It's also looking to get ahead in developing markets including India and Indonesia , where millions more are going online.
Despite challenges, competitors Netease (NTES), Tencent (Hong Kong Stock Exchange: 700-HK) and Xiaomi have also been vying for a bigger slice of pie when it comes to mobile gaming. China is the world's largest online gaming market, with the overall video game industry estimated to hit about $12 billion by 2020, according to PricewaterhouseCoopers.
Other firms involved in the new alliance with Alibaba include Mail.Ru Group, TFJoy, Efun and ONEMT, according to a statement.