CMGE Technology : Completed Acquisition of Beijing Softstar and IP of Chinese Paladin

After the closing on August 5, CMGE announced that it acquired 49% shares of Softstar Technology (Beijing) Co., Ltd. (hereinafter referred to as Beijing Softstar), a subsidiary of the famous game developer Softstar Entertainment Inc. (hereinafter referred to as Softstar) and rights and interests of IP of Chinese Paladin in Mainland China with HKD 641.84 million.

This is the acquisition after the first acquisition on April 25, 2018 with CNY 213 million for 51% shares of Beijing Softstar and rights and interests of IP of Chinese Paladin, indicating that CMGE has completely owned Beijing Softstar and the rights and interests of IP of Chinese Paladin in Mainland China.

CMGE stated that, 'The IP of Chinese Paladin has won many IP awards from official and social organizations in Mainland China, showing great influence and commercial value. For a long time, CMGE shares the same strategy with Softstar on increasing the value of IP of Chinese Paladin and enhance its vitality and influence. Based in Mainland China, we strive to develop our business globally. We are confident to promote the IP-related business with our power and progress.'

Since 2018 when CMGE became the controlling shareholder of Beijing Softstar, the Group has cooperated with Softstar in independent and joint R&D of popular IPs including Chinese Paladin, Xuan Yuan Sword, Monopoly, Stardom and Empire of the Angel, and diversified pan-entertainment elements.

In the meantime, with more investment in further development of self-owned IP-oriented game contents, expansion of world outlook and output of quality contents, many new games have been recognized by the market. In the past two years, CMGE sorted the world outlook of each IP with Beijing Softstar and successively released new games including Chinese Paladin: Huan Li Jing, Chinese Paladin: Sword and Fairy JY, Monopoly 10 and Chinese Paladin 7. Among those games, the sales of Monopoly 10 have exceeded 700,000 (as of February 28, 2021). Chinese Paladin: Sword and Fairy JY has become the recommended game on Steam right in the month when the game was released. The mobile version of Chinese Paladin: Sword and Fairy JY ranked the 1st on the Popular Game List on TapTap and became the recommended game in Apple Store. What the Chinese Paladin fans really want is the authorized Chinese Paladin-based games. In the early 2021, the theme song of Chinese Paladin 7 - Companion was released. The song ranked the first on three music platforms under Tencent Music Entertainment (TME). Along with the song, the demo of a complete part of Chinese Paladin 7 was also released, winning a number of positive acclaim. Subject to three years of R&D and tests, the game is determined to be launched on October 15.

In addition, proud of their cooperation in IP operation and licensing, CMGE and Beijing Softstar will bring a wonderful gift for players in the context of Chinese Paladin's 26th anniversary, a gift involving games, videos, contents, models and toys, licensing and offline elements. In terms of games, in addition to Chinese Paladin 7, new games are produced and developed, including the Chinese Paladin VRwith immersive experience and the card game Chinese Paladin: Wen Qing highlighting interactive features. In the perspective of models and toys, CMGE and Beijing Softstar cooperate with GSC and Pop Mart to release models and toys characterized by Chinese styles including the clay models of Ah Nu, Red Long Kui and Blue Long Kui, statue of Lin Yueru, and blind boxes of Super Kamii and weapons of heroine's in Chinese Paladin. As for videos, CMGE and Beijing Softstar will cooperate with iQIYI to film the TV shows of Chinese Paladin 4 and Chinese Paladin 5 Prequel. Besides, other TV shows, online movies and short dramas based on the IP of Chinese Paladinwill also be produced under the cooperation with platforms like Tencent Video, Tencent Penguin Pictures, Wanda Cameras and Boxing Culture. In terms of contents, works including novels of Chinese Paladin 1 (new), Chinese Paladin 2, Chinese Paladin 4, Story of Xianxia Sect, Snow at Yaotai and sequel of Qionghua Sect are increased. The art collection for the 26th anniversary of Chinese Paladin, the concert for the 26th anniversary of Chinese Paladin, the live show of 'The Present • The Chinese Style', 2021 Kugou CMJ and more offline licensed products will be present in the future. All of those are for the purpose of continuous enhancement of reputation of Chinese Paladinamong young people by reaching young consumers interested in Chinese-style elements through multiple channels.

Examples of Selected Cooperation Progresses Due to Limited Length

In the acquisition, Beijing Softstar, including its wholly-owned subsidiary of Shanghai Softstar, is also a powerful domestic company for game R&D and content production and a team featuring the greatest original content production capabilities. Lead by the Yao Shixian, the 'father of Chinese Paladin series', Beijing Softstar is mainly responsible for the development of domestic and popular PC game series such as the Chinese Paladin series and the Monopoly series. While lead by the famous producer Zhang Xiaoquan, Shanghai Softstar is mainly responsible for creation of works featuring new original IPs and boasts high-quality IP mobile games such as Chinese Paladin: Huan Li Jing and Chinese Paladin: Sword and Fairy JY. In the future, Beijing Softstar plans to establish mobile game R&D teams for the Chinese Paladin series and the Monopoly series to expand the mobile game market with more original features.

'The complete acquisition of Beijing Softstar and the rights and interests of IP of Chinese Paladin in Mainland China will help strengthen the ecological competitiveness of the Group's IP-oriented games and ensure the long-term and stable development of IP-oriented game strategy. Looking to the future, we will invest more in every aspect to produce more quality contents featuring more interactive experience in a way preferred by young users and players. Simultaneously, we will follow relevant national guidelines and focus on inheriting traditional cultures to unearth outstanding IPs and disseminate positive values. We will make every effort to sublimate the IP of Chinese Paladin to a Chinese game brand with top global influence to make Chinese culture advance, shine and penetrate.' said CMGE.