Weekly Game Investments Update #23
June 1, 2020 — June 7, 2020
Summary
- American mobile social game company Zynga (Nasdaq:ZNGA) has entered into an agreement to acquire Istanbul-based mobile casual games developer Peak Games for $1.8b valuation
- Israel-based mobile game developer and publisher Playtika has hired investment banks to prepare for a U.S. initial public offering at around $10b valuation
- San Francisco-based video game engine creator Unity Technologies is working with financial advisers to prepare for an IPO on the U.S. stock exchange this year (valuation above $6b)
- Rovio acquired Danish mobile game developer Darkfire Games (ex-Wargaming team) with a focus on RPG titles
- Russian mobile game developer and publisher Playrix has acquired Cateia Game, one of the oldest Croatia-based game developers
- Giants Gaming (known as Vodafone Giants) has acquired Spanish Esports organization x6tence
- Online digital PC games store Humble announced it is pulling together a $1m publishing fund to support Black game developers
- French mobile hypercasual studio Homa Games has acquired France-based mobile idle game developer IRL Team
- Chinese gaming blockchain technology developer of vertical public chains, GamesChain has raised investments from various funds
- Sweden-based indie game backend operator LootLocker has raised $250k in a Seed funding round
Zynga acquires mobile game developer Peak Games for $1.8b
💵 Acquisition
American mobile social game company Zynga Inc. (Nasdaq:ZNGA) has entered into an agreement to acquire Istanbul-based mobile casual games developer Peak Games for $1.8b valuation. The total amount will be paid in cash ($900m) and in the common stock of Zynga ($900m) with the acquisition expected to close in the 3rd quarter of 2020.
As disclosed by Frank Gibeau (CEO of Zynga), Peak Games had around $600m annual revenue and the valuation was based on 3x EV/ Revenue multiple. The acquisition would meaningfully contribute to the EBITDA level. In 2019, Zynga’s EBITDA amounted to $5.7M (EBITDA margin of 0.4%) which shows a significant 89.7% drop compared to 2018 results.
Peak Games has raised over $18m in venture capital up to date. It’s last round Series C was raised in late 2013.
🎯 Zynga remains very active in M&As space acquiring Small Giant Games, Gram Games, and NaturalMotion in addition to previous deal with Peak. At the end of 2019 financial year, Zynga had around $1.5b cash on the balance sheet, so Zynga still has around $600m in cash and could still acquire other companies.
🎲 Product
- Peak Games is known for casual puzzle hit games Toon Blast and Toy Blast with the intuitive tap-and-blast game mechanic
- Combined these two games show 12m+ DAU
⚙️ About Peak Games
- Established in 2010
- Headquarters — Istanbul, Turkey
- Founded by Sidar Sahin, Safa Sofuoglu, Rina Onur Sirinoglu, and Hakan Bas
- Developer and publisher of mobile puzzle games (known for Toy Blast, Toon Blast)
Playtika is preparing for U.S. IPO
💵 Potential IPO
Israel-based mobile game developer and publisher Playtika has hired Morgan Stanley and other investment banks to prepare for a U.S. initial public offering. The company is aiming to go public either later this year or early in 2021 and raise over $1b with the expected valuation of around $10b.
The timing, valuation and deal size are subject to market conditions.
🎬 History behind
Founded in 2010, Playtika has been acquired by a group of Chinese investors including Giant Network Group and Yunfeng Capital, a private equity firm founded by Alibaba Group founder Jack Ma, for $4.4b in 2016.
Over the last 12 months, Playtika has been active in M&As and has acquired several games businesses, including German mobile studio Wooga, Austrian studio Supertreat, and Best Fiends developer Seriously.
🎲 Product
- Playtika, is known for its casino-themed games and operates apps for poker and solitaire: Slotomania, BINGO Blitz, Best Friends and other
- Playtika currently boasts 27 million monthly active users
🎯 Several gaming companies have decided to go for an IPO in the next 12 months.
⚙️ About Playtika
- Established in 2010
- Headquarters — Herzliya, Israel
- Developer and publisher of mobile games
Video game unicorn Unity is preparing for IPO in 2020
💵 Potential IPO
San Francisco-based video game engine creator Unity Technologies is working with financial advisers to prepare for an IPO on the U.S. stock exchanges this year.
According to Bloomberg, the company has hired Goldman Sachs Group Inc. to lead the offering. Unity’s plans aren’t final and the timing could still change.
In May 2019, Unity has raised a $150 million Series E funding round putting the company’s pre-money valuation to $6 billion. The company has previously reported $500m net revenue in 2019.
Over the last three years, Unity has been very active in scaling its business and acquiring businesses worldwide (9+ acquisitions).
🎯 In 2019, Unity has already reported that it was targeting an IPO in the first half of 2020, but because of the high volatility in the financial markets during February — April 2020, the company decided to postpone its IPO. While stocks of video game companies demonstrated high growth over the last months, it is unclear whether 2020 is a good year for Unity’s IPO. Global financial markets are still recovering from the COVID-19 crisis, and the consequences of the coronavirus pandemic are yet to be discovered.
⚙️ About Unity Technologies
- Established in 2004
- Headquarters — San Francisco, United States
- Team of 2,000 employees
- Developer of video game engine. Unity also has a mobile ads business
Rovio acquires mobile game developer Darkfire Games
💵 Acquisition
Finnish-based Rovio Entertainment acquired Danish mobile game developer Darkfire Games (ex-Wargaming team) with a focus on RPG titles. The studio will become the fully-owned subsidiary and will now be known as Rovio Copenhagen.
Darkfire Games will continue to operate independently, while Rovio will provide support in user acquisition, live operations, technology, and analytics.
🎬 History behind
- In 2012, Square Enix opened a new Copenhagen office (later named Hapti.Co) under the IO Interactive brand with a focus on mobile casual games
- In 2017, Wargaming acquired Hapti.Co and renamed it as Wargaming Copenhagen
🎲 Product
- Darkfire Heroes — action fantasy RPG game
- Initially released on Google Play on Aug 2019
- Recently released on AppStore — Feb 2020
- Approximately 100,000 downloads since a soft launch in 2019
⚙️ About Darkfire Games (formerly Wargaming Denmark / Hapti.Co)
- Established in 2012 by Square Enix
- Headquarters — Copenhagen, Denmark
- Darkfire Games is led by Rune Vendler, head of the studio
- Team of 20 gaming industry veterans
- Developer of mid-core F2P mobile games
Playrix acquires game developer Cateia Games
💵 Acquisition
Dublin-headquartered mobile game developer and publisher Playrix has acquired Cateia Game, one of the oldest Croatia-based game developers. The acquired studio will join Playrix Croatia and its new office in Zagreb. Currently, Cateia Games’ team is working on a new and unannounced free-to-play mobile game.
The deal terms have not been disclosed. It is the second announced European studio to join Playrix.
🎲 Products
- Cateia Games is known for such titles as:
> Mary Le Chef: Cooking Passion (F2P time management cooking simulator)
> The Man with the Ivory Cane (Premium puzzle adventure)
> other mobile, Mac, and PC titles (mostly premium)
- it seems that Cateia Games previously has been working closely with such game publishers as G5, Big Fish, Koch Media
⚙️ About Cateia Games
- Established in 2004
- Headquarters — Zagreb, Croatia
- Founded by Kresimir Spes and Dejan Radic
- Team of 40 employees
- Developer of premium and F2P mobile / PC casual games
Vodafone Giants acquires fellow Spanish organisation x6tence
💵 Venture Funding
Spanish Giants Gaming (known as Vodafone Giants) has acquired x6tence. The acquisition follows on closely from Vodafone Giants raising €3m three weeks ago.
Giants Gaming will integrate x6tence into its structure. This is a strategic acquisition that merges two very important Esports emblems in Spain.
⚙️ About x6tence
- Established in 2004
- Headquarters — Malaga, Spain
- Business is led by Adrian Gomez (CEO)
- Operator of a sports gaming platform
PC game store Humble Bundle has launched $1m publishing fund to support Black developers
Online digital store Humble announced it is pulling together a $1m publishing fund to support Black game developers.
In April 2011, Humble raised $4.5m Series A round led by Sequoia Capital. In October 2017, Humble has been acquired by IGN (NAS: IGNX).
⚙️ About Humble Bundle
- Established in 2010
- Headquarters — San Francisco, United States
- Founded by Jeffrey Rosen and John Graham
- Team of 50+ employees
- PC digital game store
Homa Games acquired mobile game studio IRL Team
💵 Acquisition
French mobile hypercasual studio Homa Games has “acqui-hired” France-based mobile idle game developer IRL Team to expand its mobile development capabilities and establish a game hub in Toulouse. Aa part of the deal, Homa Games will hire all employees of IRL Team and share technology and best practices on future projects.
IRL Team will remain independent and based in its Toulouse studio, marking Homa’s first office outside of Paris.
⚙️ About IRL Team
- Established in 2019
- Headquarters — Toulouse, France
- IRL Team is founded by Hugo Dumouch, Liam Lepinay, and Antoine Violet
- Team of 3–5 employees
- Mobile idle game developer
The developer of blockchain gaming platform GameChain raised investments
💵 Venture Funding
Chinese gaming blockchain technology developer of vertical public chains, GamesChain has raised strategic investments from Block Eco Fund, Oness Capital, Collinstar Capital, Coeus Lab, and Bishijie.com.
By using GameChain tokens as an ecological bridge, game companies provide a more transparent and fair gaming environment and more reasonable and competitive incentive system. The startup helps developers to quickly access the blockchain system to maximize the landing of blockchain gaming.
⚙️ About GameChain
- Established in 2018
- Headquarters — Guangzhou, China
- Developer of gaming blockchain technology
Gaming technology startup LootLocker raised $250k seed fund
💵 Seed Round
Sweden-based game technology startup LootLocker has raised $250k in a Seed funding round from multiple angel investors including Linus Blomberg (co-founder of Avalanche Studios ) and Karl Magns Troedsson (former DICE CEO).
The startup will use this seed investment to continue developing its technology, and working with indie developers to provide the features.
🎲 Product
- Loot Locker provides support to indie game backend operation including features and live ops tools for indie developers to build, ship, and run their games
- LootLocker is free to use for your first 10,000 players every month
- It seems that the pricing depends on the number of active players per month
⚙️ About LootLocker
- Established in 2019
- Headquarters — Stockholm, Sweden
- LootLocker is founded by Alexander Bergendahl and Andreas Stokholm
- Team of 4–8 employees
- Indie game backend service provider
