Peak Games Special, Unity IPO, Zynga vs. Supercell & More
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Welcome to issue No: 6! New readers, I’m so excited to have you onboard, feel free to reply to this email if you want to have a chat or intro yourself!
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This week's biggest news was Zynga's largest acquisition to date, acquiring Peak Games for $1.8B. This is a very special acquisition for me as I started my career at Peak in the early days - back in 2011. During my time there, we worked very hard with incredible grit, learning as we go. The team has changed a lot since then but the spirit always stayed the same.
Similar to Paypal Mafia, Sidar always talked about building a Peak Mafia. These days, it is becoming a reality as lots of ex-Peak employees are starting new gaming companies. I hope that this is the beginning of a larger boom for the local tech ecosystem as it continues to grow.
Here are some useful articles about Peak written by early investors if you want to learn more:
Peak sale to Zynga drives 8.6x gross fund return for Hummingbird Ventures
CEO Frank Gibeau: Why Zynga bought Peak Games for $1.8 billion
Some interesting figures:
The team generates one of the highest, probably the highest, annual revenue per employee globally, multiple times bigger than some of the best tech companies such as Google, Apple and more. (Peak has 100 employees)
Zynga CEO Gibeau said the amount of the deal made sense as Peak Games had around $600 million in revenues, and that Zynga has typically paid for three times revenues or so in its other deals. He said Peak Games will contribute meaningfully to EBITDA (earnings before income taxes, depreciation, and amortization), though Peak Games is private and does not disclose exact profit numbers publicly.
Peak’s extraordinary D90 retention is unheard of globally, in an industry where keeping any of your players still engaged after 90 days would have been deemed outstanding performance.
📈 This Week in Numbers
$2.6B - China's NetEase targets global expansion with $2.6 billion HK listing
$1.5B - South Korean online game developer Nexon announced that it plans to invest $1.5 billion in other listed entertainment companies
Undisclosed - Playrix acquires Croatian PC developer Cateia Games
$3.1M - Play One Up Raises $3.1M Seed From Three Curve, Pro Athletes (esports tournament/matchmaking platform)
$2M - Kippo raises $2 million for a dating app for gamers
The grand vision is to create a platform for everybody, a platform that is a gamified experience for people to meet new people,” Park said. “The demographic that’s most comfortable with interacting with others in an online virtual setting has been gamers for decades. Because of COVID-19, other people are starting to learn the joys of interacting online.
$250K - LootLocker raises $250,000 seed fund
LootLocker provides features, backend services, and live ops tools for indie developers to build, ship and run their games.
Good Reads
💰Zynga vs. Supercell. The quest to be the world’s most valuable mobile gaming company! by Joseph Kim
While I’ll continue to root for both companies, I believe Supercell and not Zynga is setup for longer term success — to be clear, I certainly expect Zynga to keep killing it this year and the next year or two after that. So this comparison is more on a 10-year time horizon.
Finally, I will have to say that on a 50 year basis I don’t think either company is setup for success. In fact, I’d be surprised to see either company around in 2070. Speaking honestly, I just don’t think we have a Jeff Bezos of the games industry, hence there is no Amazon of mobile gaming and probably all of games. Perhaps with Tencent as an exception.
👑 Esports and the Dangers of Serving at the Pleasure of a King by Matthew Ball (Makers Fund)
🏆 How Coin Master’s approachable Art defined Casual Slot genre
News
Daniel Ahmad from Niko Partners said that:
Both Tencent and NetEase are exploring new opportunities in console games.
NetEase established a new studio in Tokyo to research and develop console games.
Tencent is exploring console through acquisitions, investments and self developed games
📈 Unity is said to prepare for IPO this year
Unity’s revenue growth rate is above 30% and gross margins are over 80%, its Chief Executive Officer John Riccitiello said last month. PitchBook estimates the company’s last private market valuation to be about $6.3 billion.
🖐🏻 Sony postpones PlayStation 5 event, for ‘more important voices to be heard’
📲 The Epic Games Store Will Launch On Mobile Devices
🦩 Rovio Entertainment has acquired Darkfire Games - Copenhagen based mobile games studio
📹 Youtube now the Top mobile game discovery path for kids
🌫 Sega is working on “Fog Gaming”
🚗 Sega Reveals Game Gear Micro
🦒 Animal Crossing and Splatoon Communities Are Embracing Digital Protest
I leave you with this funny tweet by Nicolo Laurent, Riot Games CEO:
Have a great weekend!
Emre
Written by Emre Colakoglu, an experienced product manager and data scientist. I’m currently based in London and working on something new. You can find me on Twitter, my personal website and LinkedIn.