July 18, 2018 / 3:48 AM / 2 years ago

China's iQiyi snaps up game maker Skymoons in $300 million deal

FILE PHOTO: The logo for Chinese streaming platform iQiyi Inc., is displayed on a screen during the company's initial public offering (IPO) at the Nasdaq Market Site in New York City, U.S., March 29, 2018. REUTERS/Brendan McDermid

SHANGHAI (Reuters) - China’s iQiyi Inc (IQ.O), often likened to U.S. streaming giant Netflix, has snapped up domestic game maker Skymoons in a deal that could be worth nearly 2 billion yuan ($298.59 million) as it looks to broaden its offerings following a U.S. listing.

The online video platform, majority-owned by internet search firm Baidu (BIDU.O), said in a statement late on Tuesday the deal involved a fixed payment of 1.27 billion yuan and an additional fee of 730 million yuan if Skymoons hits certain benchmarks over the next two years.

The deal would give iQiyi access to a broader range of characters and stories amid a fierce battle for content to lure in paying viewers with deep-pocketed rivals such as Tencent Holdings Ltd (0700.HK) and Alibaba Group Holding Ltd (BABA.N).

In China, Tencent is the leader in online gaming, a major revenue driver for the firm, and is also pushing to build up its selection of films, dramas and animated content.

IQiyi’s chief executive officer, Yu Gong, said the deal would broaden the platform’s “offering of entertainment content across multiple formats” and help create more ways to monetize the firm’s intellectual property.

“We believe Skymoons is a natural extension to our business and will strengthen iQiyi’s media platform and our overall ecosystem,” he said.

Reporting by Adam Jourdan; Editing by Himani Sarkar

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