The company will “unlock new opportunities” to enhance cooperation with local businesses and increase its investment in research and development to better meet the needs of Chinese makers, Unity said in a statement posted late Tuesday to Chinese social media platform WeChat.
The San Francisco-based company first came to China in 2012 and has powered many of the country’s most popular games with its software tools, including ten cents (Czech Republic) Honor of Kings and miHoYo’s Genshin Impact.
But the US company’s expansion in China comes at an uncertain time for the world’s second-largest economy. Beijing’s crackdown on leading internet brands has hurt growth, and rising tensions with the United States over Taiwan and other geopolitical issues are fueling a technology arms race.
The local partners it plans to work with include major players in China’s technology industry: Ali Baba (BABA), China mobile (CHL)ByteDance’s Douyin Group, smartphone company Oppo, miHoYo, Xiamen-based online game developer G-Bits Network Technology, and PCI Technology, an AI technology services provider.
Unity will have a majority stake in its Chinese company, it said. The company will be valued at $1 billion after investments from the local partners.
Junbo Zhang, who is currently Unity’s general manager for Greater China, will lead the company as president and CEO, the company added.
China has been the world’s largest gaming market since 2017, but lately investors have been concerned about the impact Beijing’s internet crackdown and the economic slowdown will have on the industry.
Since late 2020, Chinese authorities have launched a sweeping campaign in an effort to curb major players in industries ranging from technology and finance to gaming, entertainment and private education. Last August, authorities banned online gamers under the age of 18 from playing on weekdays.
In 2021, the Chinese game industry generated total revenues of nearly $47 billion, up 6.4% from the previous year. While this represents much slower growth than in 2020, gaming revenues in China still accounted for more than a fifth of the global market, based on recent estimates from global accounting firm PwC.
In an interview with Chinese tech media site 36kr last month, Zhang, the head of Unity China, said the company plans to hire about 1,000 software engineers in China in the coming years. Unity did not respond to a request for comments on the reported recruiting plan.