Internet giant Tencent Holdings acquires majority stake in Kiwi gaming firm Grinding Gear Games

A Kiwi video game company founded in a New Lynn garage has sold up 80 per cent of its shares to a Chinese giant worth more than $800 billion.

Chinese internet colossus Tencent Holdings has bought a controlling stake in West Auckland's Grinding Gear Games, which developed Path of Exile.

The Chinese online games company, the world's largest worth US$580 billion ($840b), acquired 80 per cent of the company for an undisclosed amount.

Grinding Gear Games managing director Chris Wilson said the deal meant the company could expand and hire more people for its Auckland-based studio.

"We're looking to increase our headcount over the next year from 114 full time employees to around 130," Wilson said. "We're planning to do more expansions for our games, in parallel, and of course bolstering the team will be really useful in achieving that."

The company was pushing to hire Kiwis where it could, he said.

Wilson said the deal came about after Tencent last year published its game Path of Exile in China.

"They proposed the deal after they decided they liked us," Wilson said. "There have been many people interested for a number of years but finding someone we knew would be a good fit for us and would let us get on with our own stuff independently was important because we often talk to people who have various plans for our company."

New Zealand Game Developers Association chairperson Michael Vermeulen said Tencent's investment into Grinding Gear Games was an endorsement of the quality of New Zealand's gaming industry.

"The Auckland-based team has proven over the years that they are capable of creating a highly successful product, which has gained a reputation as one of the best online action role-playing games in the world," Vermeulen said.

"Tencent is the largest games publisher in the world, has a strong reputation and is known for respecting the creative independence of the companies they invest in."

Vermeulen said international publishers and investors had increasingly become interested in New Zealand-made games.

"Our challenge as an industry is to grow more studios of scale so we can take advantage of those opportunities. Interactive gaming is a growing global market that New Zealand businesses can successfully compete in."

Path of Exile fans at a gaming event in Shanghai, China. Photo / Supplied

The video games sector is the largest entertainment industry in the world, valued at US$108.9b. New Zealand's games industry was worth $524 million in 2016/17, of which $100m was exports of New Zealand creative software.

Tencent Holdings senior vice president Steven Ma said the company was glad to have "deepen its relationship" with Grinding Gear Games.

Interactive gaming is a growing global market that New Zealand businesses can successfully compete in.

"Grinding Gear Games possesses strong development and innovation capabilities in the action role playing game genre," Ma said. "We look forward to supporting their growth and collaborating with their team in bringing great gaming experiences to gamers, both in China and abroad."

Grinding Gear Games was founded in 2006 by Chris Wilson and Jonathan Rogers in Wilson's New Lynn garage. It moved into an office in Titirangi in late 2008.

Another still from Path of Exile. Photo / Supplied

The company's game, Path of Exile, has more than two million monthly active players and more than 20 million sign-ups.

"We have a lot of cool plans for the future," Wilson said. "Our operations team who run Path of Exile in China have some neat ideas for how to make the game culturally appropriate for the region and have some cool China-centric ideas."

Wilson said Grinding Gear Games was focused on new installments of Path of Exile but would "love to" make new games in the future.

Tencent Holdings has a minority stake in Dunedin games studio Rocketwerkz.