China’s KongZhong invests $16M in Forgame Holdings

The Chinese game market remains hot.

KongZhong, the Chinese publisher of games such as Auto Club Revolution and Meteor’s Hawken mech shooter, has invested $16 million in Forgame Holdings, the developer and publisher of cloud-based web and mobile games. The transaction shows that the Chinese game market remains vital, with high valuations for game makers.

Beijing-based KongZhong, which is publicly traded on Nasdaq, said it is acquired 8.89 million shares of Forgame Holdings, which is traded on the Hong Kong stock market, in exchange for $124.51 million Hong Kong dollars, or $16 million in U.S. currency. Under the transaction, KongZhong will own about 7 percent of the shares of Forgame, which will have a valuation of about $228 million.

Forgame was founded in 2009, and it has developed and launched more than 30 games on its publishing platform, 91wan. It has also published 79 self-made and licensed web games and drawn audiences in the hundreds of millions. KongZhong said it expects synergies between its own mobile and Internet game businesses and Forgame’s strengths in mobile game development and distribution in both mainland China and overseas markets.