XD INC (02400) to Acquire Core Assets of "Torchlight" for $37.18 Million

XD INC (02400) announced that on December 29, 2025, XD Entertainment, a wholly-owned subsidiary of the company, entered into an asset transfer agreement with the sellers (Runic, Arc Games) and Golden Arc. Pursuant to this agreement, XD Entertainment has agreed to purchase and acquire all rights, title, and interests in the transferred assets for a total consideration of $37.18 million. The transferred assets include the game "Torchlight"; its technology, encompassing any and all source code; related documentation; intellectual property (IP) rights; transfer contracts; all social media accounts specified in the agreement, including usernames, page names, URLs, passwords, access credentials, all associated content, followers, subscriber lists, analytical data, and accompanying goodwill, along with the right to request the transfer of these accounts from the respective platform providers; all rights, claims, causes of action, or set-off rights against third parties related to the assets post-closing, including the right to enforce invention assignments, confidentiality agreements, or consultancy agreements, and the right to litigate (and seek damages for) any infringement or misappropriation of the "Torchlight" IP; all written or electronic records owned or controlled by the sellers related to the aforementioned items; and all goodwill associated with the transferred assets. It is stipulated that the transferred assets shall not include any assets previously owned by XD Entertainment and third parties related to "Torchlight: Infinite." Except for the excluded assets listed in the agreement, all rights, title, and interests in the transferred assets, including the "Torchlight" IP, will be exclusively owned by and vest in XD Entertainment as of the closing date. Currently, the group is required to pay royalties to external IP owners for operating "Torchlight: Infinite." Upon completion of the asset transfer, the group will fully own this intellectual property, thereby eliminating such royalty payments. This move is expected to directly enhance the profit margin of "Torchlight: Infinite," improve the group's overall profitability, and create better returns for shareholders. The asset transfer will also grant the group complete autonomy in decision-making for "Torchlight: Infinite," free from third-party licensing restrictions, ensuring the long-term stability and sustainability of the game's operations and enabling the group to respond flexibly to market opportunities and strategic priorities. Furthermore, with full ownership of the "Torchlight" intellectual property, the group will be able to independently develop sequels, derivative works, and cross-platform products. This will further enrich its product portfolio, expand new revenue streams, and realize deep value conversion and sustained growth from this high-quality IP asset.