99: Chapter 99 Drawing a Line with Three Hundred Million Dollars

The conference room was quiet for a few seconds. Shen Fei picked up his teacup, didn't drink, stared at it for a while, and then chuckled.

"Mr. Ma, Transsion currently has a very high market share in Africa and very impressive profits; we are not short on money at all. Besides, you probably can't afford this valuation."

"I am aware of what you are saying, Mr. Shen." Pony Ma spoke very slowly, as if every word had been carefully considered. "Only companies that aren't short on money are worth investing in. And how do you know I can't afford it..."

He set down his teacup and looked directly at Shen Fei for the first time...

Though it made sense; Transsion was just a shell anyway. Even though all the research institutions were called Transsion, they were all technically under Huaxin Investment...

As long as the price was right, if he wanted to invest, it wasn't... impossible. Before Shen Fei could finish his thought, Pony Ma spoke up:

"And I didn't come here today to invest in Transsion."

Shen Fei looked up at him, feeling a bit surprised at this moment. What was he trying to pull...

However, in the future, Tencent did dabble in mobile phones, specifically gaming phones focused on esports.

Right, gaming phones!

But with mobile games the way they are now... it didn't seem necessary.

However, he could have PopCap create honor of kings early. Shen Fei wouldn't just hand over this cash cow of a game to Tencent for nothing.

Since he had his own game company, he had to eat the biggest piece of the cake.

Seeing Shen Fei's lack of interest, Pony Ma stopped pretending and stated his purpose directly: "We would like to trade territory with your company."

"Social networking is Tencent's home turf." Pony Ma said this with great confidence. There had been challengers in the past, but they had all ultimately fallen at Tencent's feet.

"Over the past 10 years, some entered through gaming, some through e-commerce, and some through search, but they all eventually retreated. It's not a matter of ability, but a matter of DNA."

He made a gesture, clenching his fist slightly, indicating that Tencent was the sole dominant force in the instant messaging market within China.

"But the boundaries are blurring. Transsion is making phones and operating systems. But as you continue, you've moved into payments, and beyond payments, you've started working on local services. Although you haven't entered the field directly, those companies all have your capital behind them."

Shen Fei didn't deny it, which made Pony Ma understand completely.

"So..." He loosened his hand, his tone becoming much lighter. "Rather than waiting for the day when the boundaries are broken and we clash, why don't we draw a line first?"

Shen Fei was interested now and set down his teacup: "How do we draw it?"

"We agree to your company's previous game revenue sharing plan. But when new games and new software are launched, Chuan Yin Group must give us top-tier exposure. At the same time, you must pre-install our QQ, exclusively for three years, and stop pre-installing other social software, except for our company's other future projects..."

Pony Ma didn't state this too definitively; QQ's functions were becoming increasingly complex, but the user base wasn't growing. In fact, user time spent online was actually declining slightly.

Some within the company suggested starting from scratch to create another social software to compete with QQ—internal horse racing... But considering stability, the idea was rejected by the project team.

At this moment, Pony Ma's assistant handed over another document.

Tencent would strategically invest in Huayin Games, investing 300 million USD for a 33% stake, with a post-investment valuation of 1 billion USD. At the same time, Huayin Games would take on all of Chuan Yin Group's software business, including the introduction of fruit ninja, plants vs. zombies, and other future games.

Tencent would appoint a director, but would not participate in daily operations...

Shen Fei opened the document. The first page was the valuation terms; he gave him some face and chuckled.

The second page was a valuation adjustment mechanism agreement, requiring the games to generate 2 billion Chinese Yuan in revenue within three years. His expression immediately turned serious...

The third page wasn't as outrageous as the revenue VAM on the second page, but it was a handwritten supplementary clause, the handwriting looking like Pony Ma's: Huaxin Group social software must not enter the Chinese market.

Shen Fei was thoroughly amused by this.

"This is the bottom line." Pony Ma didn't seem to think there was anything wrong with what he said. "Africa, Southeast Asia, Latin America, even Europe—you can do whatever you want there. In China, QQ will handle it."

Shen Fei looked at that line of text and was silent for a long time.

Challengers to social software really did come in waves.

For example, Mi Talk, founded later by Lei Jun, but as wechat users exceeded 100 million in 2012, Lei Jun chose to shut it down; Laiwang pivoted in 2014; in 2019, Matong MT, Duoshan, and Liaotianbao were like the Three Heroes fighting Lu Bu. Three months later, they were all wiped out.

No one could beat Tencent in the social field, and they used their two major magic weapons, QQ and wechat, to occupy half of the gaming market.

It could be said that no one could defeat Tencent in social networking and gaming. It wasn't because the products weren't good, but because once network effects formed, the cost of user migration became too high to overcome.

But now, wechat hadn't come out yet; there was still a chance.

Seeing the outrageous document in front of him, Shen Fei was considering whether to have Huayin Games just bring out wechat and bundle it with those two games!

No, it should be three...

A while ago, Huang Tianya went to Finland again and acquired an unlucky company called Rovio Entertainment.

Calling them unlucky wasn't an insult; the company was truly unlucky. They had previously developed 51 games, but all had mediocre responses, with almost no users.

Moreover, when developing this game, the company's funds were almost exhausted, so when faced with Huang Tianya's 5 million USD full acquisition, the founder readily agreed.

And he very happily chose to go travel, wishing Huang Tianya well: "Thank you for this money; I hope I can take the company's bad luck with me."

But what he didn't know was what kind of massive waves this game, codenamed 52 and titled angry birds, would stir up...

Just then, Pony Ma, thinking Shen Fei was seriously considering it, said: "How about it, Mr. Shen? For an agency company, we're giving a valuation of 2 billion USD, which is 12 billion Chinese Yuan—that's good enough, right?"

"You should know that if we cloned two, or went to the United States or South Korea to buy the agency rights, it wouldn't cost this much."

"Mr. Ma, you're joking. You should know that this price isn't for buying the agency rights to those two games."

"Just 300 million USD to buy me out of entering the market?" Shen Fei closed the document directly and threw it in front of him. "Mr. Ma, this price is a bit stingy. Is this all the magnanimity the world's third-largest internet company has?"

Pony Ma didn't show any signs of anger, and even straightened out the document Shen Fei had thrown over.

As the head of the world's third-largest internet company, Pony Ma had ample confidence at this moment.

"You can name your price. Every product has value, not to mention a simple promise."