Chinese online game developer The9 Limited has acquired a majority stake in Red 5 Studios, the internet gamer led by members of the team behind World of Warcraft, for roughly $20 million. The investment comes just three months after Irvine, CA-based Red 5 initiated a major restructuring that resulted in as many as 30 staffers being laid off. Around the same time, the company said it had taken on additional cash from an unnamed “strategic partner in the online games industry” and has also “formed around a new direction.” Although the backer is now revealed, Red 5 hasn’t said much about the new path it has been charting.

Online gaming has been a significant growth area among other digital segments the last few years, but the competition from larger companies has meant that the gains have been unevenly won. Red 5 last took on investment in 2006, when it raised $18.5 million from Benchmark Capital and Sierra Ventures.

The investment from The9 indicates that Red 5 is looking to expand into China’s gaming market, which has been particularly hot the last few years. The9 has spent the last few years expanding its Asian holdings, most notably through an equity investment in G10 Entertainment, a game developer in Korea. Under the terms of the investment, The9 has acquired a minority stake in G10 in exchange for a cash investment of approximately $38 million. Release

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