Garena, the gaming arm of Singapore-based tech firm Sea, has acquired game developer Phoenix Labs.
The company did not say if the acquisition was a cash or stock deal, but sources close to the matter said the New York-listed firm spent over US$150 million (S$204 million) to buy 100 per cent of Phoenix Labs.
The Canada-based game developer is behind free-to-play monster-hunting game Dauntless, which is distributed by Epic Games. After the acquisition, the game will still be distributed on Epic's platform, which also houses other online video games such as Fortnite.
Garena has built its base in game distribution with headline titles such as League Of Legends, Arena Of Valor and Fifa Online 4 under its belt.
However, the Tencent-backed company's new acquisition signals an increased focus on game development as well, as it bids to capture a larger slice of the gaming industry, projected to be worth US$300 billion by 2025.
According to Garena, the strategic partnership will see the teams work together to add more features on Dauntless, as well as explore new growth opportunities in markets such as Asia and Latin America. It might also look to extend distribution for Dauntless to include mobile.
All of Phoenix Labs' staff - more than 100 top "AAA" game developers - will now be part of Garena as well.
Sea founder and chief executive Forrest Li said: "Our skill sets are highly complementary, and we see many exciting opportunities ahead that our teams can explore together."
Garena was one of Phoenix Labs' earliest investors in 2015, and has supported the growth of the company and the development of Dauntless over several years.
"Over the last few years, we have watched Phoenix Labs mature into one of the best development teams in the business and launch a hugely exciting title in Dauntless," said Mr Li.
Our skill sets are highly complementary, and we see many exciting opportunities ahead that our teams can explore together.
SEA FOUNDER AND CHIEF EXECUTIVE FORREST LI, on the strategic partnership between Garena and Phoenix Labs.
THE BUSINESS TIMES