Source: Ouya exploring options for both investment in or sale of company

Ouya, the maker of the Android-based indie game console of the same name, is in preliminary acquisition or investment talks with some big companies that are interested in the games market.

Ouya has been in preliminary acquisition talks with players like Google and Amazon in the U.S. In China, it is also exploring options for strategic investments. That information comes from a credible source who is close to the matter.

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Re/code initially reported that Ouya was in talks with multiple parties, saying that the sale of the company is one option, in addition to raising money. Ouya last raised $15 million in funding in 2013 from Mayfield Fund and Kleiner Perkins Caufield & Byers.

The company launched its tiny $99 game console in mid-2013, but the hardware didn’t sell as well as planned. Ouya then shifted its strategy to focus on software, with its core asset being a community of independent game developers who made controller-based games for its Android-based, TV-connected system.

Recently, Ouya said that it was working with Xiaomi, a top smartphone seller in China, to distribute its games in that territory, and it is working on other kinds of distribution deals. In the U.S., Mad Catz put Ouya’s software store on Mad Catz’s Android game devices.

Ouya has talked to potential partners in China, but those talks are geared toward investment, not an acquisition, the source said. China has lifted a ban on game consoles, and a number of Chinese companies are preparing to launch Android-based machines in that market. But the key to making any console succeed is having good games on it.

Both Amazon and Google might view Ouya as another chess piece in the battle of the tech titans. Amazon recently stole away the acquisition of gameplay livestreaming firm Twitch after Google decided to walk away from a tentative deal.

Amazon has Android games on its Fire TV set-top box, Kindle Fire tablets, and Fire Phone device. If it bought Ouya, it could keep it away from rival Google and add to its collection of games. Google, on the other hand, might be motivated to buy Ouya just to have a larger stable of games to offer on its own Android game box. Google previously bought the assets of Green Throttle, which made a controller to go with Android games that could be played on a big screen.

But no one has signed or is close to signing a term sheet agreement to buy Ouya.

Ouya also offers a committed staff of people who have been able to attract not only crowdfunding donors but also indie game developers. The company raised $8 million through crowdfunding site Kickstarter in August 2012. It launched its games as “free to try,” where players could enjoy part of a game for free and then pay for it if they really liked it. Ouya has experimented enough with new models, and it could help one of the tech giants get savvy in games more quickly.

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With the launch of Microsoft’s Xbox One and Sony’s PlayStation 4, the market for Ouya has been questionable. The company really needs someone with deeper pockets to help it make a bigger splash in the market.

We have contacted Ouya and are awaiting an official comment.