DECA acquires Gaia Hurricane Studio, and An An as the general manager of China; IronSource plans to acquire Tapjoy for US$400 million

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GameLook report/In the past two years, the global game market has been continuously integrating, and the most obvious phenomenon is the continuous merger and acquisition cases. In addition to the frequent giants such as Tencent, Bytedance, and EA, there are also established game companies such as Zynga and Playtika, and even European teams such as Stillfront and Embracer Group that have acquired “snowball” growth.

For colleagues in the past, when I heard about mergers and acquisitions, it was often Tencent’s acquisition of a game studio in Europe and the United States or mergers and acquisitions between European and American studios. However, in early August, the news that South Korea’s Netmarble acquired Bole Technology for US$2.19 billion and Zynga spent US$525 million to acquire the Chinese team StarLark refreshed the perception of peers.

Unknowingly, domestic mobile game developers have become the world’s first echelon, and many unknown game teams in China have become “sweet pastries” sought after by European and American capital markets. For example, on October 14th, Embracer officially announced the purchase of 8 mobile games and also purchased Hurricane Studio from Gaia Interactive Entertainment.

“Bargain hunting” long-term old game: Embracer bought 8 more mobile games

After experiencing explosive growth in 2020, the game industry has generally experienced a decline in growth rate. Embracer is obviously an exception. According to the company’s Q2 financial report, the second quarter revenue reached 3.4 billion Swedish krona (SEK), equivalent to 389 million US dollars, a year-on-year increase of 66%; EBITDA profit was 1.532 billion SEK (equivalent to 175 million US dollars), a year-on-year increase That’s 59%!

It is not an exaggeration to say that Embracer Group is the most active acquirer in the game industry in the past two years, with the number and speed of acquisitions far surpassing Tencent.Although this Swedish company claims to have acquired 150 teams is appalling, but if you understand the target of the acquisition carefully, we will find that most of the company’s acquisitions are classic IP or old games with long-term life cycles.

Through a series of mergers and acquisitions, Embracer Group now owns more than 240 game IPs, including “Saints Row”, “Simulated Goat”, “Dead Island”, “Dark Blood”, “Metro”, “Ultimate Offroad ( MX vs ATV)”, “Amara Kingdom”, “Time Splitter”, “Happy Factory”, “Rebellion”, “World War Z” and “Borderland” series.

Of course, this acquisition of Hurricane Studio is no exception.

On October 14, Embracer Group announced on its official website that through its wholly-owned subsidiary DECA Games, it has acquired Gaia Interactive’s Hurricane Studio and its 6 mobile games. He also stated that “M&A through DECA Games has gained a channel to attract Chinese talents and laid the foundation for further growth in the Asia-Pacific region.”

The other two mobile games are “Hero Hunters” and “Killshot Bravo” developed by Hothead Games Inc. After the acquisition, DECA Games’ internal team in Europe will continue to be responsible for the operation and development of these two games.

From the perspective of user volume and performance, in the third quarter of 2021 from July to September, the 8 games acquired are expected to have 150,000 DAU and 800,000 MAU, with a total revenue of 50 million Swedish kronor (equivalent to RMB 37.27 million) during the period. , This part of revenue will be included in Embracer’s performance after October.

Many people may think that the three-month turnover of 8 games is less than 40 million yuan, which is not a successful product. However, if you know the details of these games, you may feel incredible.

The six games acquired from Hurricane Studios are “Castle Age”, “Underworld Empire”, “Elves vs Dwarves”, and “Dragons of Atlantis”. of Atlantis”, “Kingdoms of Camelot: Battle for the North” and “Heroes of Camelot”.

Among these games, the oldest one is Kabam’s “King of Arthur: Battle of the North” released in 2009. This game won the top of the US iOS revenue list in 2012, becoming the first to break $100 million in revenue. SLG mobile game. With the acquisition of Kabam, Gaia Interactive got a variety of products including the game in 2016. For example, “Castle Age” and “The Underworld” both come from the Phoenix Age team acquired by Kabam in 2014.

The 6 games acquired by Gaia Interactive were handed over to its Hurricane Studio for further development. The 6 games belong to the strategy and RPG categories, and all products are for the global market, and 99% of the revenue comes from the international market outside the Asia Pacific . For an old game that has been in operation for more than 10 years, such long-tail revenue can be considered commendable.

European and American companies expand in Asia-Pacific, Chinese team becomes M&A

In recent years, “get out if you don’t go to sea” may be a phrase familiar to many colleagues. The reason is that when the domestic market enters the inventory stage, overseas markets and users can bring more and greater growth opportunities.

Embracer’s gross profit margin reached 76% in the second quarter of this year

In fact, we also apply this sentence to overseas markets. Because more and more foreign companies and investors are beginning to recognize the value of Chinese game teams. For example, Ken Go, CEO of DECA Games Studio, believes that Asia is number one in the field of mobile games in many aspects.

He said, “DECA has taken an important step in the implementation of our asset management and M&A strategy. We have acquired 8 long-term operations and well-loved games, and added a rich experience in online operations and international mobile game publishing. The elite team. I am very pleased to continue to expand the product range and explore more opportunities in the Asian market, where the mobile game talent and market surpass other regions in the world.”

Hurricane Studio is located in Beijing and was established in 2015. The current team size is 50 people. After the merger, Hurricane Studios will continue to operate as an independent studio under the name of DECA Games, and the management staff will remain unchanged. The follow-up will continue to focus on the operation of the six existing IPs. Over time, other IP generated through mergers and acquisitions and internal R&D will also be added to Hurricane Studios.

Embracer Group stated that the acquisition will bring opportunities for the group to attract Chinese talents and lay the foundation for further growth in the Asia-Pacific region. In addition, An An, the co-founder and president of Gaia Interactive Entertainment, will join DECA Games China’s new office as the general manager, responsible for DECA Games’ mergers and acquisitions in the Asia-Pacific region.

An An said, “Hurricane Studios and their global user base and long-term games are very suitable for DECA Games. Gaia Interactive and DECA Games will explore more strategic cooperation opportunities in the future, especially through mergers and acquisitions to increase cooperation in the Asia-Pacific region.”

Mobile advertising continues to integrate, IronSource plans to acquire Tapjoy for US$400 million

In addition to the mobile game market, with the arrival of the inventory stage and the implementation of Apple’s new IDFA policy, the mobile advertising field has also begun to integrate rapidly. The most obvious is a large number of mergers and acquisitions. Continuous mergers and acquisitions.

IronSource recently stated that the company plans to acquire Tapjoy, a mobile advertising and application monetization company, for $400 million. The company said that the transaction will enhance IronSource’s platform role for application developers, and plans to further expand its customer base in the field of games and applications.

Tapjoy, located in San Francisco, was originally a rewards wall company that allowed players to buy items in their favorite games by watching ads. Recently, it also launched a prize survey, allowing players to complete research and get in-app items.

IronSource Chief Revenue Officer Omer Kaplan said in the statement, “Our platform approach to serving application developers means that we can add a variety of strategies beyond the software platform to add more value to our customers. This merger followed this The strategy will ultimately allow us to serve our customers in the best way, improve our monetization capabilities, and build our platform into a more profound and complete part of the in-app purchase and in-game economy.”

The company said that customers can get more revenue through more diversified advertiser needs, including advertising in the Tapjoy market. In addition, customers can also enrich the in-game economic system through modern technology. The acquisition is also aimed at improving IronSource’s SDK in the application and game fields, and increasing the company’s market size. In other words, more developers can be covered.

Jeff Drobick, CEO of Tapjoy, said, “We are very happy to join IronSource, a top-level business platform for app developers. Tapjoy’s technology provides the world’s top brands and app developers with the ability to monetize, purchase, and reach users. Our SDK was sold by 66,000. Access to various applications, covering more than 1.6 billion MAUs worldwide. As the application economy continues to grow, we believe that IronSource is our ideal partner for product enhancement and continued growth in the future.”

IronSource said that the transaction will be carried out with cash on the balance sheet. In the long term, the transaction is a win-win situation because Tapjoy has also experienced continuous revenue growth and is expected to receive $81 million in revenue in 2021. As usual, including regulatory considerations, the merger transaction is expected to be completed within six months.

This Article is curated from Source and we only provide the English version of the Story.

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