A capital commitment agreement has been announced between Japanese animation production company Twin Engine and Chinese internet conglomerate Tencent Holdings. The deal also includes Amutus Corporation and BookLive.
This isn’t really breaking news, as the companies are entering a second round of funding (the first was in April 2019), but it kind of went unnoticed at the time.
A capital commitment indicates that a company is buying shares in another company (or companies) or that all companies are buying shares from each other. Basically, it is a business partnership agreement whereby all companies involved create ownership of a joint project funded by all parties involved.
Representatives from Twin Engine and Tencent have indicated that they will focus on long-term planning, development and production of animation content, with the main goals being “globalization” and “gamification”.
Both Twin Engine and Tencent are hoping to expand into the manga industry and also expand their anime content with the help of Amutus and BookLive.
This joint financing initiative enables all four companies to make targeted investments in strategic areas and establish new business relationships with additional media partners. The agreement also allows signers to sell distribution rights and production resources for original content.
Who are Twin Engine and Tencent?
Twin Engine is a Japanese anime production company founded in 2014 by former Fuji TV Executive Editor Noitamina, Kōji Yamamoto. From the very beginning, Mr. Yamamoto intended to engage in the planning and production of anime content and build a network of animation studios.
He kept his word in 2015 when Geno Studio was founded with the former Manglobe employees (Manglobe went bankrupt earlier that year). In 2016, Twin Engine founded Twin Engine Digital Animation Studio, animation studio Revoroot and Relation Inc., which deals with advertising.
In 2020, Twin Engine formed the studio team EOTA, which includes numerous collaborators from Geno Studio, Lay-duce, Peakys, Daisy, Studio Colorido, FILMONY, Team Yamahitsuji, Bug Film and Scooter Films.
Due to director Yamamoto’s business ties, Twin Engine is primarily collaborating with Fuji TV on its Noitamina programming block. Recently, the company has also been involved in anime programs from other TV stations.
Tencent Holdings Ltd. is a Chinese multinational technology and entertainment conglomerate. It is one of the top-grossing multimedia companies in the world and the largest in the video game industry through its Tencent Games division.
As for the other two companies, Amutus Corporation operates MechaComi (the largest electronic comics store in Japan), while BookLive is an e-book distribution and publishing company operated by Toppan Printing.
Will the Twin Engine x Tencent deal result in more ‘Chinese anime’?
Hopefully the deal means we’ll see more donghua (Chinese animation) with English subtitles in the future as Tencent is the largest online video streaming platform in China and often the only popular place to watch donghua Titles as broadcast in China.
It’s also worth noting that China’s video game industry faces two major challenges. The first is a sharp drop in sales for domestic companies due to the resurgence of “zero-COVID” policies that have led to the lockdown of major cities including Shanghai, China’s financial hub.
The second reason is stricter gambling regulations in China, which were introduced in 2021 and dictate that children under the age of 18 are not allowed to spend more than three hours a week playing online games. The approval of new games was also on hold from July 2021 to April 2022.
Tencent launched just three mobile games in the second quarter of 2022, leading to the company reporting its first quarterly year-on-year revenue decline in August 2022.
Let’s hope things get better for all companies involved in the collaboration and that fans worldwide get access to new exciting titles.