Mobile studio Pocket Gems gets a minority investment from Tencent to move into China

Update: Tencent is paying $60 million for a 20 percent stake in Pocket Gems. 

One of China’s biggest players invests in a rising mobile game company today.

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Pocket Gems announces a minority investment from Tencent, a top Internet service provider in China and likely largest gaming company in the world. This will enable the San Francisco-based studio to expand its reach into Asia, letting it use its proprietary game engine and upcoming new IP to reach 1 billion mobile players globally. This move would help position the War Dragons developer as a major player in the $30 billion mobile games market.

The terms of the investment were not disclosed.

Pocket Gems will continue to operate independently following the investment. It is targeting China for expansion following a year of impressive growth in the region, and it aims to use Tencent’s connections and expertise to gain ground there. In return, Tencent, which also has stakes in major Western game companies such as Epic Games (Unreal Engine), Riot Games (the blockbuster multiplayer online strategy game League of Legends), and Glu Mobile (Kim Kardashian: Hollywood), will look to Pocket Gems for insights into how it can reach Western mobile gamers. Tencent will also gain access to its custom Mantis game engine, which is designed for multiplayer gaming on mobile networks — which fits into game alliances that Tencent has made.

“Over the past five years, Pocket Gems’ talented team of game-makers has created a portfolio of popular products and technical innovations that have attracted a wide audience in the Western mobile games market,” said Steven Ma, the senior vice president of Tencent, in a statement. “We look forward to working more closely with them to bring innovation and excitement to gamers around the world.”

Pocket Gems recently reached the 200 million download mark across mobile platforms, and recently launched War Dragons, one of the first synchronous multiplayer games on mobile with 3D graphics.