Forget about Sony, Microsoft Apple or even Activision, the #1 gaming Company in the world is China’s Tencent Holdings.

According to Dutch research firm Newzoo Tencent Holding has outperformed some of the biggest gaming Companies by making over 180 smaller but strategic investments in gaming Companies.

The Chinese tech titan led the industry in game-related revenue last year at $32.2 billion, well ahead of Sony’s $18.2 billion and Apple’s $15.3 billion, according to Dutch research firm Newzoo.

This lead owes largely to Tencent’s wide-ranging portfolio, which includes U.S., European and South Korean companies.

Daniel Ahmad, senior analyst at Niko Partners in Tokyo recently informed clients “New games from Tencent-backed studios dominated the Steam top sellers’ chart for the week,” he said, referring to a widely used computer gaming platform.

No. 4 on the list was Elden Ring, a Japanese action role-playing game released in February that sold 13.4 million copies worldwide in just over a month. Tencent bought into Elden Ring developer From Software’s parent company, Kadokawa, last year alongside a business tie-up.

The Chinese Company has carefully lined up a strong global roster of gaming partners while minimizing any hint of Chinese influence that might turn off wary players.

Yesterday Australian gamers were warned that games aimed at children and teenagers and owned by Chinese Companies were a risk as they contain hidden high-risk code.

Data from ITjuzi compiled by Nikkei Asia shows that 40% of Tencent’s investment deals in the first half of 2022 were outside China, a large jump from the 18% share for all of 2021.

Its portfolio includes Riot Games, creator of esports fixture League of Legends; Supercell, a Finnish mobile game developer once owned by Japan’s SoftBank Group; Epic Games, the company behind Fortnite; and South Korea’s Krafton, best known for PlayerUnknown’s Battlegrounds.

“We thought that the partnership would sharply shorten the time needed to reach our goals,” said President Takayuki Kikuchi of Wake Up Interactive, a Tokyo-based company acquired by Tencent last year.

Markets like Australia, the USA and Europe are now important to Tencent Holdings with the Company recently announcing plans a global release of Honor of Kings, its biggest in-house money-maker, as early as this year.

Tencent still faces challenges, not least of which is a less-friendly regulatory environment at home. China has restricted game playtime for children. It halted the mandatory screenings of new game releases last August, and while reviews resumed in April, no Tencent games have gotten the green light.

Changes are afoot in the global market as well, as major gaming companies make big acquisitions with an eye toward the burgeoning metaverse trend. Microsoft said in January it would buy Activision Blizzard, the company behind such big franchises as Call of Duty and Diablo, for $68.7 billion, with Sony announcing its $3.7 billion purchase of Destiny developer Bungie soon after.

In the past, when Tencent made investments outside China, it avoided direct competition with big foreign platforms for users, seeing no need to rush expansion abroad when business at home was rock-solid.

This seems to be changing, as suggested by Tencent’s move last year to break out international game revenue in its earnings releases. China’s regulatory crackdown on big tech companies — from which its biggest rival, Alibaba Group Holding, is still struggling to recover — has pushed foreign markets higher on Tencent’s priority list.