Bilibili, China's leading online entertainment for the youth, announced on Dec. 12 that it signed an agreement with NetEase Inc. The agreement involved major assets acquisition from NetEase Comics, a platform behind first-ever Chinese superheroes co-created with Marvel.
Under the agreements, Bilibili has also acquired copyrights to popular storylines, publishers, and works of comic artists available on NetEase Comics.
Carly Lee, Chief Operating Officer of Bilibili, said the acquisition boosts its library of online comic offerings.
The acquisition struck as somewhat surprising for the online comic industry as NetEase Comics has actually built a name of its own. In fact, NetEase Comics is one tough competition of China's largest gaming platform, Tencent.
In May this year, it worked with Marvel to introduce the first batch of Chinese superheroes, integrating them with the 7,000 characters that it already had under its belt. NetEase Comics has also published a number of Marvel comics via its platform, including Captain America and Iron Man.
As part of the agreement with Bilibili, NetEase Comics will still have the exclusive rights for these Marvel series, according to the South China Morning Post, citing people familiar with the acquisition.
Some employees of NetEase, however, will have to be relocated to Bilibili Shanghai offices as part of the deal.
Bilibili, NetEase Comics and a spokesperson with Marvel have yet to comment on this report.
South China Morning Post said China has approximately 70 million online readers. Bilibili, NetEase Comics, and Tencent used to compete for that market as they released anime, video games and other streaming contents for the youths one after another.
There might be a bigger reason at play behind the acquisition and NetEase Comics agreement to it.
The two companies struck the deal as China implements tougher policies on online gaming licenses in the country starting April. Gaming companies had since cut costs or seek other financial resources due to loss of revenues.
The State Administration of Press and Publications has yet to issue gaming licenses to any games since April. Without these licenses, gaming companies are prohibited from domestic distribution. Tougher policies were implements as the local government became worried about the growing number of children in the country suffering from nearsightedness which could be debilitating when they grow up.
Tencent, for the past months, has been aggressively investing in different business segments.
The deal between NetEase Comics and Bilibili may be their strategy to address the issue.
