Garena buys gaming developer Phoenix Labs, sources say for over $203.7m

Garena has built its base in game distribution with headline titles such as League of Legends, Arena of Valour and FIFA Online 4 under its belt.
Garena has built its base in game distribution with headline titles such as League of Legends, Arena of Valour and FIFA Online 4 under its belt.PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - Garena, the gaming arm of Singapore-based Sea Ltd, announced on Wednesday (Jan 29) it has acquired gaming developer Phoenix Labs as part of its plans to strengthen its game-developing capabilities worldwide.

The company did not divulge if the deal was a cash or stock deal, but according to sources close to the matter, the New York-listed firm spent over US$150 million (S$203.7 million) to buy 100 per cent of Phoenix Labs.

The Canada-based gaming developer is behind the free-to-play monster-hunting game Dauntless, which is currently 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 Valour and FIFA Online 4 under its belt. However, the Tencent-backed company's new acquisition signals an increased focus on game development as well, in its bid 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. With prior experience from its hit mobile game Free Fire, Garena might also look to extend distribution for Dauntless to include mobile.

All of Phoenix Labs staff - over 100 top "AAA" game developers - will now be part of Garena as well.

Forrest Li, founder and chief executive of Sea Ltd, 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 the last 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.