Chinese video streaming giant iQIYI has agreed to pay up to $300 million to buy gaming firm Chengdu Skymoons Digital Entertainment.
The purchase diversifies and expands iQIYI’s revenue stream. It also gives it other potential characters and stories to develop into series and films. Chinese streaming firms prize original content as they compete to attract and retain subscribers, and content with proven track records is regarded as valuable IP.
Additionally, “Skymoons has entered into cooperation agreements with a number of renowned international IP powerhouses with respect to the synchronized development and promotion of mobile games, films, anime and comics based on the same source materials,” iQIYI said.
iQIYI said that it is paying RMB1.27 billion now and possible performance-related payments of RMB730 million over the next two years. Further financial details were not disclosed.
The move comes only a couple of months after iQIYI floated its shares on the NASDAQ exchange in the U.S. The company remains majority-owned by Baidu.
“Skymoons is a natural extension to our business and will strengthen iQIYI’s media platform and our overall ecosystem,” said Gong Yu, founder and CEO of iQIYI, in a prepared statement.
Competition with other video firms that are integrated into the vast tech empires of Alibaba and Tencent has led iQIYI to start behaving more like a platform company than a simple streaming player. Other diversification moves have seen iQIYI this year open the first of a small string of physical movie theaters in China and take over Baidu’s Nuomi ticket sales firm.