China e-commerce giant Alibaba Group Holding Limited (NYSE: BABA) once again diversifies its business portfolio by expanding into mobile gaming distribution, CNBC reported.
The Hangzhou-based company will invest 1 billion yuan ($145 million) to work with other mobile gaming developers to distribute mobile games in China and other parts of the world, according to CNBC.
Xiaopeng HE, President of Alibaba’s Mobile Business Group, said: “To maximize the value of Game Intellectual Property, Alibaba Digital Media & Entertainment Group will integrate the resources from UCWeb, Youku, Alibaba Pictures, Alibaba Literature to build a circulation chain for the IP derivatives. UCWeb with its massive traffic entry globally will play a significant role in the distribution of Alibaba Games.”
Alibaba has been expanding business base beyond its core e-commerce business. The company now is doing many businesses, including movies, finance and e-commerce. But the company may come across a lot of challenges when it enters the mobile gaming industry. Netease and Tencent have already dominated the mobile game industry in China. Also, it is not easy for game developers to get approval from government to publish games in China.
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.