Singapore’s Sea Ltd is looking to sell Canadian games developer, Phoenix Labs, as the tech giant looks to curb losses by cutting costs, said a Bloomberg report, citing sources.
NYSE-listed Sea saw losses widen to $357.7 million for the third quarter of 2022, compared with $165.4 million a year ago. An 18% year-on-year revenue drop at the digital entertainment (DE) or gaming division Garena — $893 million in Q3 2022 versus $1.1 billion in Q3 2021 — weighed heavily on the company’s third-quarter results.
The Singapore-based gaming and e-commerce company has engaged an advisor for the sale, said the news report, which also mentioned that investor interest has been tepid, and the sale process is yet to begin.
Sea acquired Phoenix Labs in 2020 for more than $150 million to strengthen its gaming division. The Bloomberg report said that there is a possibility Sea may not be able to sell Phoenix Labs for more than it bought.
While Sea’s most popular game has been “Free Fire battle-royale, it has also released other popular games like “Heroes of Newerth,” “Point Blank,” “Arena of Valor” and “Speed Drifters.”
Sea has been trying to focus on its core businesses and close unprofitable international units in Poland, Chile, Colombia, and Mexico. As per media reports, the company has laid off thousands of workers. Last month, Sea founder Forrest Li announced the company was freezing salaries for most staff and paying out lower bonuses.