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🗞M&A and Investment News
Microsoft may acquire Warner Bros. Interactive
It makes a lot of sense for Microsoft to acquire Warner Bros to strengthen their lineup with WB’s strong IP for Xbox Game Studios.
According to a recent report, Microsoft is among the companies looking to acquire Warner Bros. Interactive Entertainment. Warner Bros. is currently owned by AT&T who is rumored to be looking at selling the gaming rights and presumably, their library of games such as the LEGO titles, Batman Arkham and Lord of the Rings titles. The multinational company is apparently considering parting ways with Warner Bros. Interactive Entertainment in order to help alleviate its $154 billion debt. The most recently released title from Warner Bros. is Mortal Kombat 11 and it’s available for Xbox One, PS4, PC, Nintendo Switch and Google Stadia right now.
Tencent considering buying 20% stake in Voodoo
Tencent might be interesting in buying a 20-25% stake for less than 500M euros ($568M). The deal might value Voodoo at 1.5 billion euros ($1.6 billion).
This tweet by Daniel from Niko Partners make a lot of sense for Tencent as Voodoo’s 95%+ revenue comes from in-game advertising. Tencent might want to integrate Voodoo’s games into the WeChat platform to create a secondary gaming ecosystem. Hypercasual are perfect instant games.
VR fitness company FitXR scores $7.5M Series A
FitXR’s game BoxVR, has become one of the better-known purpose-built exercise apps available for VR devices. The boxing title adopts a Guitar Hero-esque interface influenced by Beat Saber but focuses on more physically demanding movements like quick uppercuts and jabs. The startup sells the app, which is available in the Oculus Store, PlayStation Store and Steam, for $29.99, with additional content packs going for $9.99.
Tilting Point acquires Plamee Studios and FTX Games assets
With the deal, Tilting Point will become the publisher of San Diego, California-based FTX’s Narcos: Cartel Wars, The Walking Dead: Free Casino Slots, and Criminal Minds: The Mobile Game. On top of that, Tilting Point will own Plamee Studios, the St. Petersburg, Russia-based developer of Narcos: Cartel Wars, which is based on a popular Netflix television show (it’s grossed $60 million in revenue since launch).
Huuuge Games has purchased interactive ad company Playable Platform
The Amsterdam-based ad firm has a focus on interactive and playable ads. As such, it has created AI-driven technology to optimise various forms of creatives, such as interactive videos and playable ads.
Playable ads space is a hot area right now, my friends at Luna Labs are building a phenomenal product and slowly building a monopoly on mobile (working with the top publishers and mobile developers).
Liden Labs and Second Life to be Acquired (yes that Second Life)
Linden Research announced last week that they are soon to be acquired by an investment group led by Randy Waterfield and Brad Oberwager – both of whom have a long history in the information technology sector. This acquisition would cover both of Liden’s significant products – the virtual world Second Life and the monetary platform Tilia.
🗞Other News
China removes Supercell’s Hay Day and 2500 other games from iOS App Store
European Union sets limits on platform madness
Facebook and Sony ramp up output of gaming devices
Facebook's Oculus, the global leading provider of virtual reality headsets by market share, is eyeing growth of at least 50% from a year ago for its latest version of head-mounted VR devices, pushing production to 2 million units, sources said. Mark Zuckerberg said in an earnings conference earlier this year that the company's revenue categorized as "others" reached $297 million for the January-March quarter, up 80% from a year ago, which was "driven primarily by sales of Oculus products."
Meanwhile Sony, the world's No. 2 video game console maker after Nintendo by shipments, has also raised production orders for its upcoming PlayStation 5 to around 9 million units, from the roughly 6 million units it had planned in spring, sources familiar with the matter said.
🍿Long Reads
Game investments in Q2 2020: Fewer deals, but bigger value at $7.8 billion
NetEase ($2.7 billion) and the sale of Peak Games ($1.85 billion) makes up more than half of the acquisition volume.
As for deal types, tracked M&As showed significant growth in value, doubling to $3.5 billion in Q2 versus $1.6 billion in Q1, with fewer deals closed in Q2 (32 vs. 39 in Q1). Major contributors are Peak Games ($1.85 billion), Jagex ($530 million), and Machine Zone (an estimated $500 million).
Great deep dive and analysis of Sea Limited (a $50+ billion company, owner of Garena (Fortnite of SE Asia). The craziest part is that I learned that they haven’t taken any VC money and Tencent was (of course) an early investor (holding 1/3 of voting rights)
Why is Apple rebuilding the App Economy?
Rise of the player-fan: The growing opportunity of mobile esports in Asia
🎙 Podcasts & Videos
I also enjoyed Games Industry M&A Outlook: Who's Getting Acquired Next? video with Joseph Kim, Saad Choudri (from Miniclip), Michael Metzger from Drake Star Partners, and Jeff Cohen from Stephens, Inc.
There’s some really good discussion around the motivation to be acquired by Zynga? (or other buyers) and potential targets.
My biggest takeaway was that while the big guys (Zynga, Applovin, Tencent and Stillfront Group) will continue to sign the big checks, there will also be a leading pack of companies competing to acquire smaller companies (like Scopely, Jam City, Playrix (already actively buying companies in Russia and Eastern Europe)). Watch the discussion below:
Oh, by the way, you can build out your own NES out of Lego:
Have a great weekend,
Emre
Curated by Emre Colakoglu, an experienced product manager and data scientist working in gaming. I’m based in London (now in Istanbul). You can find me on Twitter, my website and LinkedIn.
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