Chinese internet giant Alibaba has invested $10 million in Santa Monica video game console maker Ouya, sources close to Ouya said.
The injection of cash could help boost Ouya's presence in Asia as it expands its platform business into markets such as China and India.
Ouya founder and Chief Executive Julie Uhrman said the company does not comment on its investments, and Alibaba did not respond to requests for comment, but sources close to the matter said the two companies are in talks to incorporate Ouya's software and library of more than 1,000 games into Alibaba's set-top box.
The partnership could be a boon for Ouya, which has struggled to gain footing in the U.S. since its 2013 launch. Its console, originally funded on Kickstarter, was poised to disrupt the domestic console market with its low price point ($99 compared with $300-plus for the PlayStation 4 or the Xbox One), its lightweight and sleek design and its Android-powered operating system, which made it easy for developers to make games for the system.
Things got off to a bumpy start, though, with poor reviews and sales.
China is an emerging market in the video game industry — the Chinese government only recently lifted a ban on video game consoles that was enacted in 2000. As a growing number of people in China buy set-top boxes that can also play video games, Uhrman sees an opportunity for Ouya to "leapfrog" incumbents like Sony and Microsoft and get its platform and game library onto those systems.
In the middle of 2014, the company launched Ouya Everywhere, a move to partner with makers of set-top boxes and other consoles. The company struck a deal with Chinese set-top box maker Xiaomi last year, and Uhrman confirmed it is in talks to integrate the Ouya platform with more devices for markets in Asia.
"We see a real opportunity in places like India and China where there's no dominant app store for Android games for TV," Uhrman said. "In China specifically, because of the removal of the game console ban, set-top boxes can now play games, and we want to bring our large independent library of games to those devices."
When asked if Ouya is still a hardware company or if it is transitioning to a platform and software-only company, Uhrman said it was both.
"In the U.S., we have a hardware strategy," she said. "But internationally, where there are brands that have deeper relationships with customers and clear distribution, our strategy is to partner with them."