Unity Said to Spin Off China Unit in Bid to Fuel Expansion in Largest Games Market
Unity Software, the US developer best known for software used to design video games, is in talks to spin off its China unit to help it expand in the world's biggest games market, four people with knowledge of the matter told Reuters. San Francisco-based Unity has sought strategic investors to join it in a business valued at over $1 billion (roughly Rs. 7,800 crore) during talks, said two of the people, declining to be identified as they were not authorised to speak publicly on the matter.
Unity declined to comment.
The talks come as strained Sino-US relations exacerbate sensitivities over technology transfer and data handling across borders, prompting tech firms to reappraise their operations in China. At the same time, there is growing interest in expanding game-making software to new technologies such as the so-called metaverse, an immersive three-dimensional internet.
Unity entered China in 2012 and its eponymous software, known as a game engine, powers many of the country's most popular games such as Honor of Kings from gaming leader Tencent and miHoYo's Genshin Impact.
Rivals include Tencent-backed Epic Games, the US developer of the increasingly popular Unreal Engine 5.
Unity's spin-off plan is being driven by a desire to see its software used more extensively in China in areas as varied as smart city modelling to industrial design, as well as in the metaverse, two of the people said. Potential investors Unity has been speaking to have made big bets on the metaverse, they said.
With China tightening data handling regulation, Unity believes a spin-off would aid this expansion as it would give the unit more local ownership and autonomy over how it operates in the country, which could also increase its attraction to
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