Chinese Game Giant XD Inc. Bets Big on Studio Yet to Make Any Money

Chinese video game company XD Inc. has agreed to a deal valuing a fledgling game studio at roughly $264 million — even though the studio has yet to generate any revenue. It is a bold bet aimed at finding the next global blockbuster as the industry confronts mounting growth challenges and investor reluctance.

Hong Kong-traded XD announced in a filing that it would pay $14 million to acquire about 5.3% stake in the gaming studio MiAO. Founded in July 2022 by Wu Meng, the former chief executive of leading game publisher Giant Network Group Co. Ltd., MiAO remains in early development, posting no revenue and accumulating nearly $8.3 million in losses over 2023 and 2024.