Tencent Holdings (TCEHY) is exploring a potential acquisition of South Korean game developer Nexon Co. (NEXOF), in a move that could strengthen its gaming portfolio and boost both revenue and earnings. According to a Bloomberg report, the Chinese tech giant has reached out to the family of Nexon’s late founder, Kim Jung-ju, to discuss acquiring their controlling stake. The family holds about 44.4% of Nexon through investment firm NXC Corp., which they control.
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Talks are still in the early stages, and there is no guarantee of a transaction. Nexon, listed in Japan, is valued at around $15 billion. Complications from inheritance-related ownership and a partial stake held by the South Korean government could impact the outcome. Tencent previously attempted to acquire Nexon in 2019 but failed to close a deal due to pricing disagreements.
Tencent and Nexon Know Each Other Well
Nexon is known for long-running online hits like MapleStory, Dungeon & Fighter, and KartRider. The company operates more than 45 live games in over 190 countries and has been expanding its footprint through new titles and overseas studios. Its acquisition of Embark Studios in Sweden brought newer titles such as ARC Raiders and THE FINALS, which target multiplayer and shooter audiences.
Tencent and Nexon already work together. Dungeon & Fighter is one of Tencent’s top-grossing titles in China. The companies are also co-developing and localizing several new games for Chinese players, including The First Berserker: Khazan. Full ownership would allow Tencent to streamline publishing, localization, and monetization across key markets.
A Financial Coup
Financially, the deal would give Tencent an immediate boost. Nexon reported Q1 2025 net sales of ¥114 billion and net income of ¥26 billion. These earnings would directly add to Tencent’s gaming segment, which already delivered strong results last quarter. Tencent posted RMB 42.9 billion ($5.95 billion) in domestic games revenue, up 24% year-over-year. Its international gaming business grew 23% to RMB 16.6 billion ($2.3 billion). Combined gaming revenue for the quarter reached RMB 59.5 billion, or about $8.25 billion.
Tencent’s gaming division is anchored by well-known titles like Honor of Kings, Peacekeeper Elite (also known as Game for Peace), Dungeon & Fighter: Origins, League of Legends, PUBG Mobile, and Supercell’s Brawl Stars and Clash Royale. Many of these are classified as evergreen titles, generating over $500 million annually.
Adding Nexon’s IP would deepen Tencent’s content portfolio at a time when competition in China is intensifying and regulatory environments remain complex. Nexon’s strong presence in Japan and South Korea would also help Tencent reduce its dependence on domestic markets and improve its global reach.
There’s also a competitive angle. If Tencent secures Nexon, it would block potential rival bidders from gaining access to valuable IP and market share. Private equity firms and Korean tech players had previously expressed interest in Nexon when it was last up for sale. A Tencent-Nexon deal isn’t certain, but investors will be watching closely. If it materializes, the acquisition could act as a medium-term growth catalyst and reinforce Tencent’s leadership in global gaming.
Is Tencent a Good Stock to Buy?
Tencent Holdings Inc. boasts a Moderate Buy rating based on one analyst rating. The average TCEHY stock price target is $90, implying a 37.05% upside.
