Riot Games is a social game development company that is best known for creating the League of Legends.  Earlier this week Riot Games announced that they have raised about $8 million in Series B.  The investors include Benchmark Capital, FirstMark Capital, and Tencent Holdings.  Rather than making revenue from advertising, Tencent and Riot games depend on the sales of virtual goods.

Riot Games is currently developing an online game platform which is what the funding will go towards.  Considering that Tencent is one of the largest virtual good dealers in China, they may even lend their expertise to Riot Games.  The company is licensing the League of Legends in China and will launch in the country by 2010.

Tencent is the parent company of Internet portal QQ.com.  They sell virtual goods through their portal, IM software, social networks, and games.  These virtual goods include pets, clothing, wallpapers, etc.  Tencent made about $700 million last year according to BusinessInsider.

QQ Soft has launched a new service called QQ Xiaoyou.  QQ Xiaoyou is a social network with a demographic targeted towards universities and high school students.  Xiaoyou is the Chinese Pinyin of “Alumni.”  Only QQ.com users are allowed to use the service for now.

QQ Xiaoyou has a similar UI as Facebook and is looking to directly compete with another Chinese Facebook clone, Xiaonei.com.  QQ Xiaoyou requires users to provide real names, real photos, and will strictly verify the information.  QQ Xiaoyou takes 3 days to approve all of you information.  QQ attempted to launch a service called QQ Campus in September 2007, but that did not go so well.  QQ Xiaoyou is expected to be much better.

While QQ.com was preparing their Chinese Facebook clone competitor, Xiaonei borrowed another idea from Facebook recently.  Xiaonei decided to announce that they are create an Open Developer Platform for users to create third party applications.

QQ.com is currently the most popular IM software in China.  QQ is ranked #19 on Alexa and is owned by Tencent Holdings Ltd  (HKG:0700). 

QQ.com is part of pop culture in China as the company also provides games, ringtone downloads, and virtual pets.  QQ.com has 317.9 million active accounts of which 160 million are based in China.  Tencent is based in Shenzhen, China.  Tencent started in 1998, launched the IM software in 1999. had an IPO in 2004, and brought QQ Games to America around October 2007.

Information Source:
[1] Wikipedia: TenCent QQ
[2] China Web2.0 Review: QQ To Compete With Xiaonei.com by Tangos