Gaming Software Developer Unity to Spin Off China Unit

Unity Software Inc., the US-based software development company best known for software used to design video games, is in talks to spin off its unit in China to help the company expand in the biggest gaming market in the world.

Two people familiar with the matter said Unity Software Inc., has sought strategic investors to join it in a business, that was valued at over 1 billion dollars during the talks. Unity has declined to comment, and its share price closed up by over 5 percent. Unity Software’s spin-off plan is being driven by a desire to see the company’s software used extensively all over China, and in areas such as smart city modelling, industrial design, and also in the metaverse.

The potential investors of Unity that have been speaking to have made big bets on the metaverse. With China’s tightening regulations on data handling, Unity believes a spin-off will aid this expansion of the company as it will give the unit more local ownership, and autonomy over how the company operates in China, which can also increase its attraction to local government, and partners owned by the state.

This spin-off will be one of the biggest technology deals in China in 2022 as investment activity has slowed because of weak economic growth, regulatory tightening, and COVID-19 outbreaks.