Square Enix to create AAA original IP with Tencent

Japanese publisher Square Enix has teamed up with Chinese gaming giant Tencent with a partnership that will lead to new AAA IP.

The publisher revealed it has "signed a letter of intent to create a strategic alliance" with the internet provider, with plans to co-develop blockbuster new games franchises from scratch as well as potentially licence existing intellectual properties to each other.

There is also talk of "the establishment of a joint-venture company", although no details have been given. Square Enix says that: "Further details of the strategic alliance will be announced at a later date as progress is made."

Square Enix president Yosuke Matsuda described the partnership as a "strong boost to [our] strategy", while Tencent SVP Steven Ma said the Chinese giant has "strong expectations for this strategic alliance."

It's an obvious boon for Square Enix, which has been attempting to increase its global presence through a mix of Western IP like the rebooted Tomb Raider and free-to-play mobile titles based on its franchises, such as Final Fantasy and Kingdom Hearts. It is also working with Marvel on a multi-game project based around the hugely popular Avengers series.

But it's also another feather in the cap of Tencent, which already has extensive ties to the video games industry. The firm owns League of Legends developer Riot Games, and has a majority stake in Clash of Clans studio Supercell, casual games portal Miniclip and New Zealand-based dev Grinding Gear Games.

It also has varying stakes in Activision Blizzard, Ubisoft, Epic Games, Glu Mobile, Netmarble, Paradox Interactive, Frontier Developments, and PUBG developer Bluehole - to name but a few.

Earlier this year, our own Rob Fahey took a closer look at Tencent's global strategy - shortly after its stake in Ubisoft saved the French publisher from a hostile takeover by Vivendi.