Playtika Negotiates Sale of Israeli SuperPlay to Chinese Gaming Giant Tencent
Three months after announcing it was exploring strategic alternatives, Israeli mobile gaming company Playtika is in talks to sell its key asset, SuperPlay, to Chinese gaming giant Tencent. The deal is reportedly valued between $1 billion and $1.5 billion. Playtika acquired SuperPlay in November 2024 from its founders Elad Netzer and Gilad Almog, both former Playtika employees, for $690 million in cash plus an earn-out mechanism potentially worth up to $1.25 billion based on SuperPlay's performance from 2025 to 2027.
SuperPlay's rapid growth has ironically become a financial burden for Playtika. The company exceeded revenue targets significantly, with 2025 revenues reaching $573 million, 67% above the baseline set for earn-out payments. Consequently, Playtika raised its estimated future payments to SuperPlay's founders to $734 million at the end of 2025 and further to $829 million in Q1 2026. One major growth driver was a new solitaire game launched in partnership with Disney, generating an estimated $300 million annually.
The prospective sale to Tencent would relieve Playtika of these growing financial obligations, as Tencent is expected to assume the earn-out payments. This move also addresses Playtika's balance sheet challenges, including $2.3 billion in debt maturing in 2028-2029, much of which was raised during a low-interest period and will need refinancing at higher rates. The accounting treatment of the earn-out payments has also negatively impacted Playtika's net income, contributing to a $309 million loss in Q4 2025.
Despite these challenges, Playtika reported a 10% revenue increase in Q1 2026 to $745 million and raised its full-year revenue forecast to $2.75-2.85 billion. However, its stock has lost about two-thirds of its value over the past three years and currently trades at around $1.5 billion market cap. Playtika is controlled by Alpha Frontier Limited (52%), with businessman On Chau holding 21% and founder Robert Antokol about 4.8%.
Tencent, founded in 1998 in Shenzhen by Pony Ma and partners, is one of the world's largest internet and gaming companies. It owns Riot Games and holds stakes in Epic Games, Supercell, and Ubisoft. Tencent's WeChat app has over 1.4 billion monthly active users. The company has recently faced increased regulatory pressure in China, leading to a strategic shift toward international markets, cloud services, and artificial intelligence.
Playtika's potential sale of SuperPlay marks a significant strategic shift, as the company moves away from its core casual gaming growth engine amid financial and market pressures.
