As the digital behemoth seeks global expansion to counteract slowing growth at home in China, Tencent is recalibrating its M&A strategy to focus more on buying majority holdings, primarily in foreign gaming companies.

Tencent Holding Ltd. has long made investments in a large number of emerging companies, mostly in the domestic market. As a passive financial investor, it has often acquired minority stakes and remained invested.

The four sources with firsthand knowledge of the situation told Reuters that it is currently aggressively attempting to acquire majority or even controlling holdings in foreign companies, particularly in gaming businesses in Europe.

The change coincides with the fact that the top-grossing gaming company in the globe is turning to international markets for future expansion, which, according to the sources, calls for a solid portfolio of top-grossing games.

After two years of crackdowns and regulatory uncertainties that hurt their domestic sales and caused a sharp selloff in their stocks, Tencent’s new strategy demonstrates how China’s internet giants are attempting to emerge from the regulatory shadows.

One of the insiders and another source with first-hand knowledge of the situation both stated that Tencent is interested in purchasing worldwide assets related to the so-called metaverse, particularly in Europe, in addition to the core gaming industry. Since the news was confidential, the individuals declined to give their names.

Long before any new rules in China, according to Tencent, the corporation had been investing abroad. Without going into further detail, the company stated that it seeks out creative enterprises with excellent management teams and allows them space to develop autonomously.

According to three of the sources, Tencent is pursuing larger investments in gaming companies at the same time that other technology behemoths like Microsoft, Sony, and Amazon are buying up gaming assets and related intellectual property.

On a post-earnings call in August, Tencent’s chief strategy officer, James Mitchell, stated that the company would continue to be aggressive in acquiring new game companies abroad.

“In terms of the game business, our strategy is … to focus on developing our capabilities, especially in the international market. We will continue to be very active in terms of acquiring new game studios outside China,” Mitchell said.