Proceedings of the 2025 International Conference on Hybrid Commerce, Human Capital, and Economic Dynamics (ICHCH 2025)

<Previous Article In Volume
Next Article In Volume>

Valuation Analysis of Mergers and Acquisitions in the Gaming Industry: A Case Study of Tencent’s Acquisition of Supercell

Authors
Chenyu Zhou1, *
1The School of International Law, China University of Political Science and Law, 102249, Beijing, China
*Corresponding author. Email: g22301021@cupl.edu.cn
Corresponding Author
Chenyu Zhou
Available Online 18 June 2026.
DOI
10.2991/978-2-38476-585-0_15How to use a DOI?
Keywords
M&A Valuation; Gaming Industry; P/E Ratio Model
Abstract

This study examines the complex problem of intangible asset valuation in the gaming industry, focusing on Tencent’s acquisition of Supercell in 2016, through a combination of theoretical valuation methodologies in cross-border mergers and acquisitions. This study reveals the limitations of the cost approach and income approach in the valuation of the gaming industry. The cost approach causes substantial valuation impairment due to its inability to quantify the asset-light enterprises, and the income approach is subject to the constraints of the high iterative nature of the gaming industry and product life cycle uncertainty, which results in significant prediction deviations. This study validates the market approach by calculating Supercell’s market value based on the average price-to-earnings ratio of small and medium-sized game companies in Europe, then extrapolates the market discount due to cross-border mergers and acquisitions risks. The results of the study reveal that the Price-to-Earnings ratio model in the market approach accurately matches the transaction value after adjusting for risk discount factors. This research concludes that asset-light valuation in the gaming industry should utilize industry-calibrated Price-to-Earnings ratio and dynamically incorporate non-financial risk discount factors.

Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Download article (PDF)

<Previous Article In Volume
Next Article In Volume>
Volume Title
Proceedings of the 2025 International Conference on Hybrid Commerce, Human Capital, and Economic Dynamics (ICHCH 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
18 June 2026
ISBN
978-2-38476-585-0
ISSN
2352-5428
DOI
10.2991/978-2-38476-585-0_15How to use a DOI?
Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Chenyu Zhou
PY  - 2026
DA  - 2026/06/18
TI  - Valuation Analysis of Mergers and Acquisitions in the Gaming Industry: A Case Study of Tencent’s Acquisition of Supercell
BT  - Proceedings of the 2025 International Conference on Hybrid Commerce, Human Capital, and Economic Dynamics (ICHCH 2025)
PB  - Atlantis Press
SP  - 119
EP  - 130
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-2-38476-585-0_15
DO  - 10.2991/978-2-38476-585-0_15
ID  - Zhou2026
ER  -