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Online Gamer Red5 Studios Reveals $20 Million Investment From China’s The9

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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David Kaplan

@davidaKaplan Mar 22, 2010 9:14 AM ET

Posted In: Entertainment, Gaming, Money, M&A & Venture Capital, Venture Capital, Countries, Asia, China

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Matt

Rafat,

Thank you for responding to my post. I am glad to hear it. I do believe we need to highlight ways that we can avoid such tragedies. Thank you for doing so and thank you for easing my fear of PR's pitching tragedy.

Matt

tatiana perez

Hola :
Soy tatiana de Chile les queria dar mis condolencias a nombre de mi pais por tan duro gorpe que tubieron que vivir desgraciadamente todos aquellos estudiantes,profesores,reptores,etc.En general EE.UU.
Mucha fuersa para todos hojala que como pais salgan adelante por tan dura prueba que una ves mas han tenido que vivir como pais.
las mas sinceras condolencias atodos de una chilena que a la distancia los apolla y sufre como una mas de ustedes.

ATTE A UD.
TATIANA PEREZ (SANTIAGO DE CHILE)

Rafat

Matt
The post was done to highlight precisely how maybe such tragedies maybe could have been averted through the use of mobile technology. And no, no one pitched me on this.

Matt

Can we not use tragedy to peddle product. PR guys should know better. It's absolutely absurd, ridiculous and unprofessional. Mark should be ashamed and cleartxt should fire their firm.

I remember one PR lady who used 9-11 to pitch Hot Pockets…. she doesnt work in PR anymore…

I hope E2campus‘ and Rave Wireless didn't pitch Rafat on this and I hope journalists around the country would black list people who use national tragedy as a way to peddle products. Of course these companies need to use such examples to help people understand what they do, but not on day 2…

Mark

There's another text messaging alerting company for colleges, cleartxt, has offered a version of their system for free for a couple of years. Their website said they created the free version after hurricane Katrina specifically for sending emergency alerts. Their website is www.cleartxt.com.