gaming-weekly-05

GGP Gaming Weekly – Week 11

Highlights

Tencent Announces 2020 Fourth Quarter Results (link)

  • Online games revenues grew by 29% to $5.98B, among which international games revenues were $1.50B, up 43% YoY
  • Increases in games revenues were primarily driven by contributions from smart phone games including Peacekeeper Elite, Honour of Kings, PUBG Mobile, and Moonlight Blade Mobile
  • Total smart phone games revenues were $5.61B and PC client games revenues were $1.56B
  • Honour of Kings was the top-grossing mobile game worldwide for the second consecutive year and continued as the most popular mobile game in China by MAU
  • Tencent’s partnership with Nintendo yielded over 1 million Switch consoles sold and published a dozen popular Switch titles in China
  • League of Legends attracted over 45M peak concurrent viewers for its 2020 World Championship Finals, setting a record viewership for a games eSports event

Rocket League is racing onto mobile (link)

  • Psyonix is to release a mobile version of Rocket league later this year
  • As confirmed on the Company’s website, the Epic Games subsidiary Rocket League Sideswipe will come to iOS and Android devices

Nexon invests $874M in Bandai Namco, Konami, Sega and Hasbro (link)

  • The firm disclosed investments amounting to $874M, spread across Bandai Namco, Konami and Sega Sammy, as well as toys manufacturer Hasbro
  • The investments come after Nexon's board approved plans to invest $1.5B into entertainment companies that "demonstrate the ability to develop and sustain strong, globally recognized intellectual property."
  • The $874M represents 58% of this authorized investment, so more announcements are likely to follow
  • Nexon emphasized that these are "long-term friendly investments" with "no intention of acquisition or activism."

Crash Bandicoot Mobile Game Reaches 8M Downloads (link)

  • The mobile title Crash Bandicoot: On The Run was released recently for Android and iOS and reports are already showing that it's been downloaded more than 8M times since launch
  • On The Run was developed by King, the same company behind Candy Crush Saga which has been a mainstay in mobile gaming since launching in 2012
  • To put Crash's download numbers into perspective, on the day it was released, Candy Crush, one of the most successful mobile game in history, was downloaded 1.4M times

M&A and Capital Raising

ByteDance snaps up Shanghai-based studio Moonton Technology (link)

  • ByteDance subsidiary Nuverse has acquired developer and publisher Moonton Technology
  • Reuters reported that the deal had valued the Shanghai-based studio at $4B, however ByteDance did not disclose the size of the acquisition
  • Moonton CEO Yuan Jing has clarified that the company will maintain its independence from ByteDance and its games arm once the agreement has been complete
  • Founded in 2014 by former Tencent employees, and is best known for its smartphone MOBA Mobile Legends: Bang Bang, which was released in 2016

Social gaming platform Rec Room raises $100M at $1.25B valuation (link)

  • Social gaming platform Rec Room has raised $100M at a $1.25B valuation
  • The funding is another vote of confidence for user-generated content
  • Users-as-creators is a big theme in the latest gaming boom, which has seen user-generated content platform Roblox go public and Overwolf raise $52.5M for PC gaming mods and helper apps
  • Existing investors Sequoia Capital and Index Ventures led the round, with participation from existing investor Madrona Venture Group
  • Rec Room launched as a free-to-play experience in 2016, and now it has 15M lifetime users
  • Revenue grew 566% in the past year as monetization came together, said CEO Nick Fajt in an interview with GamesBeat

Digital Turbine to acquire Fyber for $600M (link)

  • The company is to acquire 90% of the shares from the current majority stakeholder, Tennor Holding B.V.
  • Overall, for the 100% of Fyber, Digital Turbine will pay $600M
  • The majority, $400M, will be paid in Digital Turbine shares, while $150 will be a cash sum
  • It is believed that the deal will be closed in Q2 2021, with the backing of Fyber's executive and supervisory boards

MTG acquires Ninja Kiwi, the studio behind Bloons (link)

  • Modern Times Group (MTG) has acquired New Zealand-based studio and publisher Ninja Kiwi
  • Ninja Kiwi is best known as the creator of Bloons Tower Defense, a series of strategy titles
  • The acquisition comes in at approximately $142M, with a potential $47M in further consideration

Frost Giant secures additional $5M funding (link)

  • The former Blizzard developers at Frost Giant Studios have attracted another $5M in investment
  • This funding came from Korean VC fund Kona Ventures, Global Founders Capital, the co-founder of Rxbar nutrition bars Jared Smith, as well as games entrepreneur Eden Chen
  • It comes in the wake of the $4.7M that Frost Giant raised when it was established in October 2020

Ryu Games secures $2.3M in funding (link)

  • Mobile games platform Ryu Games has secured $2.3M in funding
  • The round featured participation from Velo Partners, Citta Ventures, MGV Capital, INP Capital, Side Door Ventures, and 500 Startups
  • Ryu Games specializes in esports, meaning it offers cash prizes for competitive tournaments. As such, it will use the money to grow, building upon its offerings when it comes to competitions

Others

A Pikmin AR mobile game is coming from Nintendo and the Pokémon Go team (link)

  • Nintendo and Pokémon Go developer Niantic are aligning for a new partnership
  • This deal will bring the companies together to produce new augmented reality mobile games based on Nintendo characters
  • They announced this collaboration will kick off with a new Pikmin smartphone app designed to “make walking fun,” according to Nintendo
  • Previously, Niantic had a deal with The Pokémon Company but not directly with Nintendo

Riot website confirms details about its League of Legends MMO (link)

  • The League of Legends MMO, which may not go by the name “World of Runeterra,” is only one of a number of new spinoff projects coming from Riot
  • The company is also making a fighting game called “Project L,” and it launched the PC shooter Valorant last year

Gaming Public Multiples

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GGP Gaming Weekly – Week 10

M&A and Capital Raising

Riot veterans raise $37.5M for Theorycraft Games startup (link)
Griffin Gaming Partners participated in the round
  • Industry veterans from Riot Games and other studios have raised $37.5M to launch their Theorycraft Games studio
  • The studio of six people is based in Seattle and Los Angeles, and it is working deep, competitive player-versus-player games
  • China’s NetEase led the round, and other investors include NEA, Bitkraft Ventures, Griffin Gaming Partners, Sisu Game Ventures, and a small group of strategic angel investors
  • The Company will use the proceeds to recruit diverse and driven talent to the Theorycraft team to develop a community-driven, PvP game available on multiple platforms
Zynga acquires Diablo co-creator’s Echtra Games in expansion to PC and consoles (link)
  • Zynga has acquired Echtra Games, the game studio that Diablo and Torchlight co-creator Max Schaefer started, as part of its expansion into cross-platform games that include PC and console
  • The transaction continues the company’s strategy of growing through deals. In this case, it is taking a step further with a push into PC and console
  • Echtra Games uses proprietary cross-platform development tools and technologies built on top of Epic’s Unreal Engine, and that will strengthen Zynga’s development capabilities for future cross-platform projects
  • The terms of the deal were not announced, as the value is smaller than previous Zynga acquisitions

Vungle acquires mobile game analytics firm GameRefinery (link)

  • Mobile performance ad platform Vungle has acquired GameRefinery, a Finland-based mobile game analytics service firm
  • GameRefinery’s Game Intelligence platform provides developers with retention and monetization insights through its cloud-based developer tools, and has customers including Zynga, King, Rovio, and Ubisoft
  • GameRefinery offers deep contextual data sets across 160,000 gaming apps, which will help Vungle’s platform to enable advertisers to target contextually relevant campaigns
  • GameRefinery brings image recognition and creative tagging capabilities that Vungle Creative Labs (VCL) will use to provide performance recommendations for its largest customers

Fortnite developer Epic buys Fall Guys studio Mediatonic (link)

  • Epic Games announced that it has acquired Fall Guys: Ultimate Knockout studio Mediatonic for an undisclosed sum
  • Epic CEO Tim Sweeney says this is part of his company’s quest to create an online world for players to express themselves and play together
  • “It’s no secret that Epic is invested in building the metaverse, and Tonic Games shares this goal,” said Sweeney. “As Epic works to build this virtual future, we need great creative talent who know how to build powerful games, content and experiences.”
Dream Games raises $50M for casual puzzle titles (link)
  • Mobile games developer Dream Games has raised $50M in a Series A funding round
  • Index Ventures led the investment, while existing investors Balderton Capital and Makers fund also participated
  • The developer is known for its work with Peak Games on the Toon Blast and Toy Blast games acquired by Zynga last year in a deal worth $1.8B
  • The Istanbul-based studio will use the proceeds to work the casual puzzle games, with its first title, Royal Match, being launched today for both iOS and Android devices

Rivalry raises $20M for sports and esports online betting (link)

  • Rivalry has a mobile and PC platform that makes it easy to place bets on sports and esports matches
  • The Company has an offshore gambling license with the Isle of Man, which enables it to facilitate gambling in places where there’s no domestic licensing in place
  • Rivalry will use the funding to accelerate its expansion plans through new licenses and gray markets under its existing regulatory regime, including in the US
Virtuix raises $11M on SeedInvest for Omni One VR treadmill (link)
  • Virtuix said it has raised $11 million from 4,000 investors on the SeedInvest equity crowdfunding platform for its home-based Omni One VR treadmill
  • The proceeds will help the company introduce a new generation of its consumer virtual reality devices
  • The successful funding is a reminder of how well VR has fared during the pandemic, when people have been willing to try new digital experiences while stuck sheltering at home
  • Omni One will feature its own game store with 30 titles at launch, including games developed by Virtuix alongside top titles licensed from third parties
India’s All-Star Games raises $1.5M to make cricket sports games (link)
  • Indian game startup All-Star Games has raised $1.5M to make multiplayer games based on sports such as cricket on iOS and Android
  • Lumikai, a game-focused fund that invests in Indian companies, led the round, with additional participation from Play Ventures
  • The studio’s first title, Cricket Star, was developed as a hypercasual game and drew over 60% retention after the first day, and its second title, RCB Cricket, generated over a million downloads in five days

Others

Roblox public offering is a vote about the metaverse (link)
  • Roblox, the platform for user-generated games, will go public through a direct listing of its shares on March 10
  • On average, 32.6M people come to Roblox every day, and more than 1.25M creators have made money in Roblox
  • In the year ended December 31, 2020, users spent 30.6B hours engaged on the platform, an average of 2.6 hours per daily active user each day
  • Amid the pandemic, Roblox CEO Dave Baszucki said he has enjoyed seeing experiments in Roblox like concerts and parties that enable people to enjoy each other while socially distanced – and the Company will likely continue expanding beyond “traditional gaming” events on its platform

SEC green-lights Microsoft's acquisition of ZeniMax Media (link)

  • The SEC has approved Microsoft’s acquisition of Bethesda-parent ZeniMax Media
  • The deal is unable to close until regulators in the EU similarly gives their approval
  • As of the initial announcement, the deal is expected to close in the second half of Microsoft’s fiscal year, which ends June 30th, 2021

Gaming Public Multiples

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GGP Gaming Weekly – Week 09

Highlights

Playtika reports FQ4 2020 earnings (link)

  • FQ4 2020 Results
    • Reported revenue of $574M, representing 17% YoY growth and versus consensus of $555M
    • Reported Adj. EBITDA of $210M (37% margin), representing a 24% YoY growth and versus consensus of $190M
    • Reported net income of $76M (13% margin), representing a 153% YoY growth due primarily to the flow-through impact of increased revenues
    • After giving effect to the proceeds raised in the IPO in January 2021, available liquidity, defined as “Cash and Cash Equivalents” as of December 31, 2020, plus the Company’s undrawn revolving credit facility, is over $1B
  • FY 2020 Results
    • Reported revenue of $2,372M, representing a 26% YoY growth and versus consensus of $2,353M
    • Reported Adj. EBITDA of $942M (40% margin), representing a 32% YoY growth and versus consensus of $891M
    • Reported net income of $92M (4% margin), representing a 68% YoY decrease
  • Company-Reported Highlights
    • Casual portfolio exceeded $1B in revenue for the first time
    • Bingo Blitz hit its 10-year anniversary with record revenue of $443M, up 38% YoY
    • Solitaire Grand Harvest achieved record revenue of $147M, up 95% YoY
    • June’s Journey achieved record revenue of $168M, up 90% YoY
  • FY 2021 Guidance
    • Revenue: $2,440M (versus consensus of $2,420M)
    • Adj. EBITDA: $920M (versus consensus of $884M)

Enad Global 7 reports FQ4 2020 earnings (link)

  • Financial Highlights
    • Reported net revenue of $23M, representing a 245% increase YoY
    • Reported Adj. EBITDA of $1M
    • The Company’s cash balance at the end of the period amounted to $129M
    • Reported earnings per share of -$0.14
  • Significant Events
    • EG7 completed the acquisition of Big Blue Bubble
    • EG7 entered into an agreement to acquire Canada-based game developer Piranha Games, known for MechWarrior, for ~$25M
    • EG7 completed its acquisition of US- based game developer Daybreak Game Company, known for EverQuest, Lord of the Rings, and Dungeons & Dragons, for ~$300M
    • EG7 raised ~$200M by issuing 20,731,707 shares in a new offering

Roblox plans to list shares on March 10, reports 82% revenue growth to $923M for 2020 (link)

  • Roblox, the platform for user-generated games, will go public through a direct listing of its shares on March 10th
  • The Company reported that it lost $253M on revenues of $924M (82% increase YoY) for the year ended December 31st
  • Roblox DAUs rose to 32.6M in 2020 from 17.6M in 2019 and the Roblox Platform has a community of 8M active developers
  • Roblox had originally planned for an initial public offering last fall, but it postponed that plan and raised $520M at a valuation of $29.5B

Jerry Bruckheimer joins Skillz board of directors (link)

  • Competitive mobile games platform Skillz has added producer Jerry Bruckheimer to its board of directors
  • “Skillz puts the excitement and competitive drama of esports into the hands of billions of people around the world” said Bruckheimer
  • Bruckheimer previously sat on the board of privately held ZeniMax Media, Bethesda's parent company

M&A and Capital Raising

Hiro Capital Leads $15M Investments in Snowprint, Double Loop, and Happy Volcano (link)

  • London-based Hiro Capital focuses on investing in games, esports, digital fitness, and the metaverse
  • The three mobile and cross-platform studios will use Hiro’s investment to expand their development pipelines and accelerate global growth
  • Snowprint Studios was founded in 2015 in Sweden and operates their debut mobile title Legend of Solgard and is now also working on an unannounced title and Rivengard, a turn-based tactics game that launched globally on January 21
  • Double Loop Games is a San Francisco-based studio preparing to launch its social mobile title, made for players who don’t think of themselves as gamers
  • Happy Volcano Games is a Belgium-based studio that launched the critically acclaimed narrative exploration game, The Almost Gone, and are currently working on a new soon-to-launch cross-platform game, You Suck at Parking

Beamable raises $5M for Unity-based live game services platform (link)

  • Beamable has raised $5M in funding to fuel its new business of providing a live services platform for game developers
  • The round was led by Companyon Ventures and GrandBanks Capital with additional participation from Defy.vc, Oyster Funds, and others
  • Beamable equips developers with the technology to help them continuously operate, update, monetize and socialize their games
  • Over 20M users have accessed games built on Beamable, resulting in $150M in revenue transacted over the platform

Bebopbee raises $2M to create match-3 casual puzzle games (link)

  • BebopBee, a Silicon Valley game studio focused on match-3 puzzle games, has raised $2M in funding from Bitkraft Ventures, 1Up Ventures, IGG, and angel investors
  • BebobBee will use the capital to build live operations and a marketing program to acquire more players
  • The studio wants to pioneer the next-generation of free-to-play match-3 puzzlers on mobile

IronSource acquires creative management platform Luna Labs (link)

  • Mobile monetization firm IronSource has acquired Luna Labs, the maker of a creative management platform used to create mobile ads
  • Luna Labs’ technology allows app developers to create, manage and optimize their playable ad and video ads, at a fast speed and on a large scale
  • Luna Labs’ SaaS platform enables developers to create ads directly from their game code and then automatically generate unlimited variations of the ads

Netmarble acquires a majority stake in Kung Fu Factory (link)

  • Mobile games developer Netmarble is set to acquire a majority stake in WWE: Champions developer Kung Fu Factory
  • Through the deal, the indie developer will become a subsidiary of Netmarble US
  • Currently, the two companies are working together with the NBA and NBPA on creating NBA Ball Stars

Miniclip makes strategic investment in Green Horse Games (link)

  • Through the investment, Miniclip has become the majority stakeholder of the Romanian studio Green Horse Games
  • Green Horse Games is known for its title Football Rivals

Others

Sony announces new PSVR for PlayStation 5 (link)

  • Sony announced that PlayStation 5 is getting its own virtual reality system, a successor to PSVR for PlayStation 4
  • The Company announced that it will connect to the PS5 with a single cord and will feature improved resolution, tracking, and field of view
  • PSVR for PlayStation 4 launched in 2016 and sold over 5M headsets

Esports firm VSPN considering an IPO (link)

  • Versus Programming Network (VSPN) is considering going public in an IPO expected to raise sever hundred million dollars
  • Shanghai-based VSPN was founded in 2016 and has offices in Saudi Arabia, Indonesia, South Korea and the US
  • The company is known for mobile esports tournaments across a range of games, including Honor of Kings, Peacekeeper Elite – known as PUBG Mobile in the West – and Clash Royale
  • In October 2020, the esports Company raised $100M in a Series B funding round led by Tencent

Gaming Public Multiples

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GGP Gaming Weekly – Week 08

Highlights

Embracer Published FQ3 Interim Report (October-December 2020) (link)

  • The Company’s stock did not react materially following earnings, though has traded up nearly 30% YTD, and 18% in FQ3 2020
  • Reported a 44% YoY increase in Net Sales to $262M, versus consensus of $251M
    • Net Sales includes the following reported games segments: Deep Silver (37%), THQ Nordic (28%), Saber Interactive (23%), Coffee Stain (7%), and DECA Games (5%)
  • EBITDA increased by 70% YoY to $106M, versus consensus of $96M
  • The Company reported Adj. EPS of $0.13, versus consensus of $0.14
  • Year-over-year, total game development projects increased 56% to 150, and total headcount increased 93% to 5,730 (including 4,325 total game developers)
  • Following the reported quarter, Embracer announced acquisitions of Gearbox Entertainment, Easybrain Limited, and Aspyr Media for a total day-one purchase price of $1.1B

Stillfront Reports 2020 Year-End Results (link)

  • Stillfront reported strong growth, though the Company traded down ~5% after earnings-release, falling short of revenue consensus figures
    • Reported net revenue of $130M for FQ4 2020, representing an increase of 96% YoY and versus consensus of $144M
    • Reported Adj. EBITDA of $55M for FQ4 2020, representing a 42% margin and a 121% increase YoY
  • Highlights
    • Reported 22M MAUs and 4M DAUs as of December 31st
    • Currently consists of 19 studios, including Candywriter, Moonfrog, Nanobit, Sandbox, Storm8, SuperFreeGames, and more
    • Portfolio consists of 42 games, with 20+ upcoming titles in pipeline for soft-launch in 2021, including Pet Clinic, Game of Nations, and Albion Online Mobile
    • Currently, Stillfront’s portfolio consists of 77% mobile

Netmarble Reports FQ4 2020 Results (link)

  • Netmarble reported modest growth, and the Company traded down ~2% since earnings-release after falling short of Q4 2020 and FY consensus figures
    • Reported net revenue of $560M for Q4 2020, representing an increase of 12.4% YoY and versus consensus of $612M
    • Reported net revenue of $2.24B for FY 2020, representing an increase of 14% YoY and versus consensus of $2.28B
    • Operating profit of $250M, representing a margin of 11%, 34% YoY growth, and versus consensus of $247M
    • International revenue (outside of Korea) accounted for 72% of total revenue
    • Genre portfolio showed diversification across RPG (33%), MMORPG (31%), Casual (24%), and others (12%)
  • Pipeline
    • Netmarble will launch numerous new titles in 2021, including Blade & Soul Revolution and NBA Ball Stars in Q1, Ni no Kuni in Q2, and Seven Knights Revolution and Marvel Future Revolution in 2H 2021
U.S. gamers spent $4.5B on PC hardware and accessories in 2020, according to The NPD Group (link)
  • Hardware and accessories for the PC gaming space reached $4.5B in the United States last year, which is up 62% compared to 2019 and more than twice the sales in the same period in 2017
  • NPD also noted that PC gaming content increased 19% to $7.5B
Zynga set to enter console market with Star Wars: Hunters (link)
  • Zynga announced its first console title developed by Zynga subsidiary NaturalMotion Games in collaboration with LucasFilm Games
  • Star Wars: Hunters is a free-to-play online shooter that is set to release on Nintendo Switch and mobile devices later this year
Twitch and Facebook Gaming break viewership records (link)
  • Twitch experienced its best viewership month to date in January 2021 with more than 2B hours of viewership, and Facebook Gaming had 439M hours of viewership
  • Combined, the two platforms experienced a 117% YoY increase in viewership

M&A and Capital Raising

Artie raises $10M as it pivots to make instant games (link)
  • Artie has raised $10M to make instant Mobile games that can be played directly inside social media, video, and messaging platforms in a way that bypasses the app stores 30% tax
  • Artie’s technology enables Mobile games to be played directly inside media platforms without any additional app downloads, applications programming interface (API) access, or integration needed, said CEO Ryan Horrigan in an interview with GamesBeat
  • The Company is focused on making Mobile games easier to discover and play for consumers while improving the economics of mobile games for developers and creators

Colossi Games secures $2.5M in seed funding (link)

  • Cyprus-based mobile games developer Colossi Games has raised $2.5M in a seed round led by EQT Ventures with additional participation from Play Ventures
  • Colossi Games will use the funding to create a new Mobile social survival title set in the Roman Empire
  • The game will feature multiplayer gameplay with users able to band together, and face off against opponents in the Colosseum
Lucid Sight acquires Colyseus open-source multiplayer game engine (link)
  • Lucid Sight, a maker of blockchain games, has acquired the open-source multiplayer engine Colyseus for an undisclosed price
  • Colyseus projects have seen millions of monthly active users and have processed billions of monthly requests
  • The Los Angeles-based Lucid Sight makes blockchain games such as MLB Champions and CSC featuring Star Trek, and now it will be taking over the Colyseus brand, GitHub, and all social and support channels

Others

Amazon’s New World delayed to August 31 (link)
  • Amazon announced that its online role-playing game New World is going to miss its spring release window, instead setting an August 31 release date
  • Last year, Amazon Game Studios released Crucible, its first major title, but the multiplayer shooter only lasted a few months before dissolving
  • The extra time will let Amazon add “substantial improvements while polishing and fine tuning the whole game.” It starts a closed beta July 20, which is available to anyone who preorders
Plants vs. Zombies: Battle for Neighborville hits Switch on March 19 (link)
  • Developer PopCap Vancouver is launching the competitive shooter on the hybrid home/handheld console as a “Complete Edition” on March 19
  • EA and PopCap worked with the port specialists at QLOC. This is the first Frostbite Engine game to come to Switch
  • This is one of seven games that EA promised to release for Switch over the 12-month period starting in June. Others include Apex Legends launching March 9, Velan Studios’ new game, and EA Partners’ game Lost In Random
Velan Studios will launch Knockout City dodgeball game on May 21 (link)
  • Velan Studios and Electronic Arts will launch the team dodgeball game Knockout City on PC and consoles on May 21
  • Prior to that date, the companies will launch a closed beta on Origin and Steam on February 20-21
  • Under the EA Originals label, this free-to-play game will debut on the Nintendo Switch, PlayStation 4, Xbox One, the PC via Origin and Steam
  • The 3-on-3 or 4-on-4 multiplayer game will be available on the PlayStation 5 and Xbox Series X/S through backward compatibility with graphical and performance enhancements
Destiny developer Bungie is expanding as it preps for new games and more (link)
  • The Company revealed that it has added new members to its board of directors, including media executives Trace Harris and ViacomCBS consumer products president Pamela Kaufman
  • The addition of Harris and Kaufman is notable because Bungie is planning to push into other entertainment mediums. Harris spent 13 years at global multimedia conglomerate Vivendi. Kaufman, meanwhile, works on licensing and merchandising for Nickelodeon, MTV, and CBS properties
  • The Company is also growing its offices and bringing in new production talent. This expansion is in preparation for the continued operation of Destiny as well as the release of a new Bungie product by 2025
Rovio confirms April launch for upcoming fantasy RPG Darkfire Heroes (link)
  • Rovio confirmed that its upcoming title Darkfire Heroes will launch globally across Google Play and the App Store in April 2021
  • Darkfire Heroes is a mid-core RPG strategy game with a single-layer campaign, as well as PVP arenas for players to team up and battle with friends
  • Rovio acquired Danish mobile games developer Darkfire Games in 2020, and Darkfire Heroes will be the studio’s debut release
The N3twork Scale Platform partners with Emerald City Games (link)
  • The N3twork Scale Platform is set to publish its 10th game after it formed a partnership with Emerald City Games
  • The Canada-based studio, and its title Lionheart: Dark Moon, joins the likes of 99 Games, MeeWow Games and Two Hand Games, who have also joined the N3twork Scale Platform
  • Lionheart: Dark Moon had D1 retention of 44% and strong monetization in its initial NSP test period

Gaming Public Multiples

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GGP Gaming Weekly – Week 07

Highlights

Take-Two Reports FQ3 2021 Earnings (link)
  • TTWO reported FQ3 2021 Net Bookings that exceeded expectations, primarily driven by growth in its core franchises
    • Reported FQ3 2021 net bookings of $814M representing a 8% decrease YoY, but significantly exceeding prior outlook ($675M - $725M) and consensus ($757M)
    • Reported FQ3 2021 digitally-delivered net bookings of $664M, representing a 4% decrease YoY
    • Reported FQ3 2021 diluted EPS of $1.57 vs. $1.43 in FQ3 2020, representing a 10% increase YoY
  • Franchise highlights
    • Grand Theft Auto V has sold more than 140M units to date, and more units were sold in CY 2020 than in any other year except for 2013 when it was first launched
    • Grand Theft Auto Online outperformed internal forecasts and grew 28% YoY and is expected to achieve a new net bookings record in FY 2021
    • Red Dead Redemption 2 has sold over 36M units worldwide to date
    • Red Dead Online had more new players in December than any other month since its beta launch in 2018, and the game had more overall players in 2020 than in 2019
    • NBA 2K 2021 has sold 8M units across all platforms with net bookings for the NBA 2K franchise growing 48% YoY
    • Playdots title Two Dots introduced its biggest feature update of the year, including competitive leaderboards, which helped the game increase ARPDAU 12% QoQ, and the game now has its highest payer conversion rates ever
  • Development Pipeline
    • Take-Two reiterated its target of 93 new game releases in the next 5 years
      • 63 of the 93 are core gaming experiences, 17 are mid-core/arcade style experiences, and 13 are casual experiences
      • About half of them will come from existing IP and half will come from new IP
      • 72 of the 93 are planned for PC/Console/Streaming including 7 that will also be available on Mobile, and 21 that are Mobile-only
      • 67 of the 93 will need to be purchased, and 26 will be free-to-play
Ubisoft Reports FQ3 2021 Earnings (link)
  • Reported FQ3 net bookings of $1,212M representing a 142% increase YoY, and exceeding prior revenue outlook of $1,003M – $1,119M
    • FQ3 YTD digital net bookings increased 39.9% YoY to $1,506M, comprising 71% of total net bookings
    • FQ3 YTD back-catalog net bookings increased 33.3% YoY to $1,233M, comprising 58% of total net bookings (overlap exists between digital and back-catalog)
  • FQ3 Highlights
    • Ubisoft ranked as the second-highest publisher for new-generation consoles, including PlayStation 5 and Xbox Series X/S, with Assassin’s Creed Valhalla, Watch Dogs: Legion, and Immortals Fenyx Rising all in the top 7 best sellers
    • Ubisoft ranked as the top third-party publisher (CY2020, according to NPD for NCSA and GSD/Gfk for EMEA) in 2020 on Switch, with Just Dance 2020, the 8th best seller
    • Assassin’s Creed Valhalla achieved record revenues for the franchise
    • Just Dance 2021 net bookings rose sharply compared to Just Dance 2020
  • Strong Momentum in Back-Catalog
    • Ubisoft saw record growth for Brawlhalla, Mario + Rabbids Kingdom Battle, Far Cry 5, The Crew 2, and Anno 1800
    • Just Dance back-catalog experienced a 200%+ surge
    • Steep rise in engagement for Assassin’s Creed Odyssey and Origins
    • 70M players registered since launch of Tom Clancy’s Rainbow Six Siege
  • Breakdown of FQ3 net bookings
    • North America (48%), Europe (39%), RoW (13%)
    • PS4/PS5 (37%), Xbox One/Series X/S (23%), PC (21%), Switch (13%), Mobile (5%), Other (1%)
  • Game Delays and Developments
    • Ubisoft plans on releasing multiple games in FQ4 across PC, Console, Android, and iOS, including Anno 1800: Docklands, Immortals Fenyx Rising: Myths of the Eastern Realm, Tom Clancy’s Rainbow Six Siege: Year 6, Watch Dogs: Legion – Update 1, and more
    • Ubisoft’s Price of Persia remake has been postponed indefinitely
    • Ubisoft announced a collaboration with Lucasfilm Games on a new Star Wars game
Zynga Reports FQ4 2020 Earnings (link)
  • Reported strong FQ4 results, with record levels of engagement, highest ever quarterly revenue and bookings, as well as record DAUs and MAUs
    • Reported FQ4 2020 bookings of $699M, representing a 61.4% increase YoY, and exceeding prior revenue outlook of $670M
    • Reported FQ4 2020 international revenue of $236M, representing a 50% increase YoY, and international bookings of $280M, representing a 57% increase YoY
    • Reported FQ4 2020 operating cash flow of $206M vs. consensus of $128M, representing a 119% increase YoY
    • Reported all-time best advertising revenue of $117M, representing a 47% increase YoY
  • FQ4 Performance
    • Highest revenue and bookings performance in Zynga’s history, with record online game – or user pay – bookings of $582M, representing a 64% increase YoY
    • FQ4 represented the all-time best revenue and bookings quarter for Words With Friends, Empires & Puzzles, and CSR2, as well as Zynga’s Social Slots and Casual Cards portfolios
    • Record average mDAUs of 36M and mMAUs of 134M, representing a 77% and 103% YoY increase respectively
    • Bookings mix included: Forever Franchises (70%), Social Slots & Casual Cards (15%), and Other (15%). FY 2020 figures are comprised of a similar mix
  • FY 2020 Performance
    • Highest revenue and bookings performance in Zynga’s history, with record online game – or user pay – bookings of $1.96B, representing a 52% increase YoY
    • Record advertising revenue of $307M, representing an increase of 12% YoY
    • Executed two transformational acquisitions – Peak and Rollic – adding scale to the platform and expanding Zynga’s international audience base
    • Peak contributed two at-scale “Forever Franchises”, Toon Blast and Toy Blast, and Rollic added three of the top 50 downloaded US iPhone games in 2020
  • Capital Position
    • Issued $875M of convertible notes in FQ4, providing net cash proceeds of $794M after the cost of the capped call transactions and other issuance fees
    • Ended FY 2020 with cash and investments of ~$1.57B, putting the Company in a strong financial position in which to pursue additional M&A
  • Additional Key Performance Indicators
    • Daily Engagement, calculated as DAUs/MAUs, was 27% in FQ4 2020, down from 30% in FQ4 2019
    • Average Bookings per mDAU (ABPU), was $0.205 in FQ4 2020, representing an 8% decrease YoY
Game accessory sales set new January record at $222M (link)
  • According to The NPD Group, spending on video game accessories reached a January record of $222M a 73% increase YoY
  • The gamepad, headset/headphone, and steering wheel categories all set new January dollar-sales records
January 2021 NPD: Nintendo games and holiday hits lead surging sales (link)
  • According to The NPD Group, video game hardware sales grew 144% YoY and video game content sales grew 36% YoY
  • January’s top selling games were Call of Duty: Black Ops: Cold War, Assassin’s Creed: Valhalla, and Marvel’s Spider-Man: Miles Morales
  • We're Five Games is developing an updated version of Totally Reliable Delivery Service, alongside a new game in the series that will be released in 2021
  • Hungry Couch will continue the development of upcoming RPG Black Skylands
  • Moon Moose will continue development of Cartel Tycoon, a management simulation game scheduled for release in 2021

M&A and Capital Raising

Electronic Arts to Acquire Glu Mobile (link)
  • Transaction Overview
    • EA will acquire Glu for an equity value of $2.4B, and a total enterprise value of $2.1B including Glu’s net cash of $364M (representing 3.5x 2021 revenue and 20.3x 2021 EBITDA); EA traded +1% in after-hours trading as a result of the announcement, Glu traded +34%
    • Glu stockholders will receive $12.50 in cash for each share of Glu stock, representing a 36% premium to Glu’s closing share price on February 5, 2021 (34% premium to Glu’s closing share price on February 8, 2021)
    • The board of directors of EA and Glu have approved the transaction and the Glu board recommends that Glu stockholders approve the transaction and adopt the merger agreement
    • The transaction is anticipated to close in the quarter ending June 30, 2021, subject to approval by the Glu stockholders, the receipt of required regulatory approvals, and other customary closing conditions
  • Transaction Rationale
    • The acquisition will be immediately accretive to EA’s total net bookings, and is expected to grow underlying profitability beginning in its first year
    • Glu will add scale to EA’s mobile games business – a combination of the two businesses generated a combined $1.32B in bookings over the last twelve months
    • The combined organization will build on EA’s network of 430M players, including more than 100M monthly active players in mobile
    • The combined organization will span many genres of mobile games, including sports, RPG, lifestyle, casual, and mid-core games
    • Glu’s franchises like Design Home, Covet Fashion, and MLB Tap Sports Baseball will benefit from Electronic Arts’ global licensing and distribution capabilities to bring them to new markets and more players
Homa Games raises $15M to make hypercasual mobile games (link)
  • Paris-based mobile publisher and developer Homa Games has raised $15M in a seed round from Idinvest, E.ventures, and angel investors
  • Since its founding, Homa Games has focused on hypercasual launching hits including Tower Color, Sky Roller, and Nerf: Epic Pranks
  • Homa Games quadrupled its team in the past year, expanding its reach to offices in Toulouse, Lisbon, and Skopje
Candivore raises $12M for match-three title Match Masters (link)
  • Israel-based Candivore has raised $12M in funding for its match-three title Match Masters, led by VGames
  • The proceeds from the raise will be used for user acquisition for Match Masters, which has attracted over 1M MAUs with more than 5M matches played each day
My.Games invests $1.5M in Pizza Club Games mobile studio (link)
  • My.Games has invested $1.5M in San Francisco-based mobile game studio Pizza Club Games
  • As part of the deal, My.Games Venture Capital is providing both money and support for scaling the business, including marketing, game design, employee recruitment, and product analytics
  • Pizza Club Games developed Raid Boss, a free-to-play mobile character collector that offers players the opportunity to take charge of their own guild and battle bosses
  • Raid Boss is currently available on Android, with the company planning to release an iOS version and add new game mechanics
Asmodee acquires Board Game Arena, a platform for playing tabletop games online (link)
  • Board Game Arena has been around since 2010 and experienced 600% growth in 2020
  • The Company has official virtual tabletop versions of 250 games, supports 40 languages, and has more than 5M users signed up
  • Board Game Arena will operate independently and remain focused on virtual tabletop development, not PC adaptations of Asmodee games
TinyBuild acquires three new studios (link)
  • TinyBuild has acquired three new studios; We're Five Games, Hungry Couch, and Moon Moose

Others

Tilting Point will invest up to $60M in user acquisition for Loop Games’ Match 3D game (link)
  • Tilting Point will spend as much as $60M on user acquisition for Match 3D, a promising puzzle game from Turkish developer Loop Games
  • Tilting Point is a free-to-play game publisher and provider of user acquisition services, that works with smaller developers, taking their hit games and making them more successful by spending money on advertising for the games

Gaming Public Multiples

Feature-Image-Template-02

GGP Gaming Weekly – Week 06

Highlights

PLAYSTUDIOS to become the first publicly listed Mobile games company offering players real-world rewards through its merger with Acies Acquisition Corp. (link)

LionTree served as advisor to PLAYSTUDIOS and PIPE placement agent on the transaction
  • PLAYSTUDIOS has developed a portfolio of top-ranked games that have attracted a loyal following due, in part, to the Company’s playAWARDS Loyalty Program
  • The program lets players earn real-world rewards from a curated collection of over 80 partners and 275 entertainment, retail, travel, leisure, and gaming brands
  • To date, the PLAYSTUDIOS community has used its in-app loyalty points to redeem over 10M rewards with a retail value of nearly $500M
  • The transaction implies an enterprise value for PLAYSTUDIOS of $1.1B, or 2.5x projected 2022 revenue of $435M or 12.3x projected 2022 pro forma Adjusted EBITDA of $90M
  • Consideration to PLAYSTUDIOS will comprise at least 89.1M shares of ACAC common stock and up to $150M in cash
  • In addition, funds and accounts managed by BlackRock, ClearBridge Investments, Neuberger Berman Funds, and MGM Resorts International are leading participants in the $250M PIPE, at a price of $10.00 per share of common stock of Acies immediately prior to the closing of the transaction
Embracer acquires Aspyr Media, Easybrain, and Gearbox Entertainment (link 1) (link 2) (link 3)
  • Embracer Group is the parent company of game businesses with a catalog of over 200 owned franchises, such as Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory, Wreckfest, Insurgency, and World War Z
  • Aspyr Media
    • Aspyr offers system level engineering, platform and store optimization, quality assurance and production, multiplatform publishing, and support, assisting game developers to connect and market their games to targeted audiences. The Company is based in Austin, Texas
    • Most recently, the Company expanded its presence on new platforms, publishing titles such as the Nintendo Switch and PlayStation 4 port of Star Wars Jedi Knight II: Jedi Outcast
    • During 2020, Aspyr generated approximately $40.6M in revenues and $11.4M in EBIT
    • Enterprise Value (up-front): $100M (2.5x EV/Sales, 8.8x EV/EBIT)
  • Easybrain
    • The Company offers infrastructure, procedures, and tools needed to build Mobile games & applications, and offers predictive analytics, modeling tools, and product and marketing intelligence, enabling developers to build robust applications and games. The Company is based in Minsk, Belarus
    • Easybrain’s senior management: Peter Skoromnyi, Matvey Timoshenko, and Oleg Grushevich will jointly become the third-largest shareholder in Embracer
    • Easybrain will become Embracer’s eighth operative group as a wholly-owned subsidiary
    • Easybrain’s revenues in 2020 are expected to be $210M, while its EBIT will be $70M
    • Enterprise Value (up-front): $640M (3.0x EV/Sales, 9.1x EV/EBIT)
  • Gearbox Entertainment
    • The Company develops video games for PC, console, and other platforms, and is based in Frisco, Texas
    • The transaction gives Gearbox access to new capital to help it make more games and become a significant part of the Embracer Group, which has 5,500 employees around the world
    • Over the years, Gearbox has worked on the Borderlands and Brothers in Arms franchises, and helped with the development of Half-Life, Counter-Strike, Tony Hawk’s Pro Skater, 007 James Bond, and Halo
    • Enterprise Value (up-front): $363M (2.2x EV/Sales, 5.5x EV/EBIT)
AppLovin to Acquire Berlin’s Adjust in $1B Deal (link)
  • Mobile apps company AppLovin is acquiring Adjust, a Berlin-based startup that makes tools to measure the performance of apps allowing mobile app developers to track and analyze performance of marketing campaigns. Its users include Yelp Inc. and Foodpanda GmbH
  • The deal values Adjust at close to $1B, according to a person familiar with the matter
  • AppLovin is a game publisher as well as marketplace for other mobile apps. Backed by private equity firm KKR & Co., AppLovin has diversified from gaming through acquisitions
Candivore raises $12M to boost Match Masters puzzle game (link)
  • Candivore has raised $12M to fund growth for the Company’s games such as Match Masters, a mobile match-3 puzzler
  • The title has more than a million monthly active users who play more than five million daily matches
  • The Tel Aviv, Israel-based studio has 25 people, and the funding team came from Funtomic, which operated the Kizi flash game portal, started in 2009
Nerd Street Gamers raises $11.5M for digital esports platform (link)
  • Nerd Street Gamers has raised $11.5M to expand its digital esports platform
  • The investment comes from San Francisco venture capital firm Founders Fund
  • Previously, Nerd Street Gamers raised nearly $12M from Philadelphia discount retailer Five Below (and others) to build esports Localhost facilities that house leagues, training camps, tournaments, and showcases
Anzu.io raises $9M for in-game ad platform (link)
  • Anzu.io has raised $9M in new funding for its platform for a new generation of in-game advertising
  • The Tel Aviv-based Anzu.io claims it can make its platform more intelligent by seamlessly integrating digital ads directly into gameplay, without disrupting the user experience
  • Clients include game publishers Ubisoft, Lion Castle, and Nacon. Brands using it include Pepsico, Samsung, American Eagle, and Vodafone
Oculus cofounder’s Mountaintop raises $5.5M for shooter game (link)
  • Headed by Oculus cofounder Nate Mitchell, Mountaintop has raised $5.5M for a player-vs.-player first-person shooter game
  • The seed round comes from an unidentified group of investors, friends, and family
  • The Company surfaced in June, and now it has nearly 20 full-time employees
  • The Company is not yet saying what the game will be about, and hasn’t announced any platforms, but it is actively hiring people with PC and console experience
Phoenix Games acquires match-three mobile studio SmileyGamer (link)
  • Phoenix Games has acquired Belgian mobile games publisher SmileyGamer for an undisclosed amount
  • The purchase will see SmileyGamer work on new seasonal experiences for the mobile platform, while expanding on its already existing games portfolio via live ops, user acquisition and further ad monetization
  • Founded in 2016 by Jochen De Schepper, the publisher has specialized in match-three titles, finding success with Farm Charm, Easter Egg Match and Shape Matcher

M&A and Capital Raising

Activision Blizzard Reports FQ4 2020 Earnings (link)
  • ATVI reported increased YoY revenue during FQ4 2020, and strong growth in its core franchises
    • Reported FQ4 2020 revenue ex-deferrals of $3,051M representing a 12.7% increase YoY, and exceeding prior revenue outlook of $2,732M
    • The BoD declared a cash dividend of $0.47 per common share, payable on May 6th, 2021 (representing a 15% increase from 2020)
  • ATVI Business Segment Highlights
    • Activision: 128M MAUs in the fourth quarter
      • 2020 was a record year for the Call of Duty franchise, as Activision’s premium and free-to-play experiences, including Call of Duty: Warzone, sustained more than 100M monthly active players, driving ~100% growth in the franchise’s net bookings YoY
      • Call of Duty premium unit sales grew over 40% YoY
      • Call of Duty Mobile delivered its best quarter yet, with the highest level of monthly payers in the West and average spend per payer strongly increasing YoY – the franchise also launched in China in late December, bringing it to a large new market
    • Blizzard: 29M MAUs in the fourth quarter
      • World of Warcraft grew for the full year as the franchise’s net bookings increased 40% YoY, reaching the highest level it has seen in nearly a decade
      • World of Warcraft MAUs grew YoY for the sixth consecutive quarter, contributing significantly to Blizzard’s total MAUs
    • King: 240M MAUs in the fourth quarter
      • In 2020, King achieved its best full year financial performance since Activision Blizzard’s acquisition in 2016
      • In-game net bookings grew by a double-digit percentage YoY, with growth accelerating versus the third quarter
      • Candy Crush, King’s largest franchise, was the top grossing franchise on U.S. app stores, as the game saw double-digit growth YoY in in-game net bookings
      • Advertising net bookings for King grew nearly 50% YoY
EA Reports FQ3 2021 Earnings (link)
  • EA reported strong top line growth during FQ3 2021
    • Reported FQ3 2021 net bookings of $2,400M representing a 19% increase YoY, exceeded prior net bookings outlook ($2,350M) and exceeding consensus expectations ($2,388M)
    • EA paid its first quarterly dividend of $0.17 per share in FQ3 2021 and announced that it will pay an additional dividend of $0.17 per share in March
  • EA’s marquee franchises have continued to see strong performance
    • EA launched four games during FQ3 2021 (FIFA 21, Medal of Honor: Above and Beyond, Need for Speed Hot Pursuit Remastered, and NHL 21)
    • The Company indicated that it will announce the next Battlefield title in the coming months, with a targeted release date by the 2021 holiday season
    • EA SPORTS franchises have engaged more than 230M people over the past fiscal year
    • FIFA Ultimate Team matches have grown 177% YoY, and experienced a record of nearly 6M daily active players in December
    • Over the last ten fiscal years, FIFA and Madden live services have grown at a CAGR of nearly 50% and 60% respectively
  • EA SPORTS is a focus area for future growth
    • EA announced that it will return to collegiate sports through the development of a college football game that will feature logos, stadiums, uniforms, gameday traditions and more, but will not include student-athlete names, images, and likenesses
    • The Company also announced a multi-year UEFA Club Competition license extension to reinforce EA’s positioning as the leading soccer video game developer
    • The proposed acquisition of racing game developer Codemasters will expand EA SPORTS’ offerings into F1 racing, a high-growth global sport
Nintendo Reports FQ4 2020 Earnings (link)
  • The Company reported a successful holiday quarter, in which Switch sales were higher than ever, and software sales were strong
    • The Company achieved sales of $6,041M compared to consensus of $5,552M, and reported EPS of $13.06 compared to consensus of $10.36
    • 11.57M consoles were sold in total, bringing the device to nearly 80M sold since its launch in 2017
    • Nearly 76M software units were sold, as Mario Kart 8 Deluxe and Animal Crossing: New Horizons both crossed the 30M mark, and The Legend of Zelda: Breath of the Wild and Pokémon Sword/Shield have now sold more than 20M copies each
    • Nintendo has increased its forecast for FY 2021 to 26.5M switch units, also boosting its net profit estimate 33% to $3.82B
    • The Company expects to launch new titles to Switch including Capcom’s Monster Hunter Rise
Sony Reports FQ3 2020 Earnings (link)
  • Overall, Sony reported a strong quarter, achieving sales of $25.656B compared to consensus of $23.904B
    • Game & Network Services increased to $8.42B in Sales and $760M in Operating Income in Q3 ‘20, up 40% and 50% respectively YoY
    • Game & Network Services is expected to generate $25.03B in Sales and $3.24B in Operating Income for FY20, up 33% and 43% respectively compared to FY19
  • Game & Network Services growth was driven by an increase in game software sales including add-on content, and an increase in hardware sales due to the PlayStation 5 launch
    • The Company expects higher-than-expected game software sales, peripheral device, and PS Plus sales to continue
    • The PlayStation 5 achieved 4.5M unit sales in Q3 ’20 (compared to the 17.8M of PS4s sold in FY18 and 13.5M sold in FY19)
    • Game & Network Services revenue mix for Q3 ’20 is comprised of Hardware (27%), Physical Software (6%), Digital Software (20%), Add-on Content (29%), Network Services (11%), and Other (7%)
  • PS Plus subscribers and MAUs on PlayStation Network held steady over the quarter
    • PS Plus subscribers increased ~3% QoQ to 47.4M, representing a 22% increase YoY
    • PS Plus MAUs increased ~5.5% QoQ to 114M
  • PlayStation 5
    • Currently, the Company has achieved 4.5M sell-in units through Q3 ‘20
    • Sony is on track to meet its sales goal for the fiscal year of more than 7.6M units, but has not been able to fully meet the high level of demand from customers
    • Total PlayStation user gameplay time in December was ~30% higher than the same month of the previous fiscal year
    • By the end of 2020, 87% of PS5 users were subscribers to PlayStation Plus
    • First-party game Marvel’s Spider-Man: Miles Morales recorded sell-through of 4.1M units at the end of 2020
Unity Reports FQ4 2020 Earnings (link)
  • Unity reported solid results for FQ4 2020 and for its full year, which included its first few months as a public company, though the Company traded down ~11% in after-market trading after reporting earnings due to lower forecasted growth, and perceived headwinds as a result of Apple’s impending changes to IDFA
    • Reported total revenue for FQ4 and FY 2020 of $220M and $772M, representing a 39% and 43% YoY increase respectively
    • On a per share basis, Unity’s FQ4 and full year non-GAAP net loss was ($0.10) and ($0.39), respectively, vs. consensus of ($0.14) and ($0.37)
  • Key drivers of FQ4 and FY 2020 results
    • Unity grew its customers who are >$100k 7.3% QoQ and 32% YoY
    • Games made with Unity accounted for 71% of the top 1,000 mobile games in FQ4
    • MAUs who consumed content created or operated with Unity reached on average 2.7B per month in FQ4, up 63% YoY
    • Applications built with Unity were downloaded on average 5B times per month in FQ4, up 41% YoY
  • Segment Performance
    • Create Solutions
      • Revenue in FQ4 increased 39% YoY to $67M
      • Revenue for the full year grew 37% YoY to $231
    • Operate Solutions
      • Revenue in FQ4 increased 55% YoY to $134M
      • Revenue for the full year grew 61% YoY to $471
    • ​​​​​​​Strategic Partnerships and Other Revenue
      • Revenue in FQ4 decreased 19% YoY to $19M
      • Revenue for the full year decreased 12% YoY to $70M
Skillz and the NFL to Launch Contest for Branded Mobile Multiplayer Games (link)
  • The NFL is one of a handful of the world’s most valuable sports leagues, with perhaps 500M people familiar with the brand
  • The league announced a partnership with newly public game-platform operator Skillz for a contest to develop a league-branded multiplayer Mobile title
  • Contest winners will get the NFL brand attached to their title, which Skillz CEO Andrew Paradise said in an interview could be a potentially hugely valuable differentiator
Google stops Stadia game development and closes its studios (link)
  • Just slightly over a year after launching its Stadia platform, Google is starting to scale back its gaming ventures
  • The Company is closing its two game development studios and cancelling its projects aside from “any near-term planned games”, as reported by Kotaku
  • Google started the Stadia Games and Entertainment division in March of 2019
Blizzard confirms "multiple" free-to-play World of Warcraft games are on the way (link)
  • Activision Blizzard has revealed that it has "multiple" free-to-play World of Warcraft games in development for Mobile
  • The unannounced titles were confirmed by CEO Bobby Kotick during the Company's latest earnings call, noting that both classic and modern games have seen a rejuvenated interest throughout 2020
  • Additionally, Blizzard was reportedly working on a Pokémon GO-styled World of Warcraft spin-off for the platform in November 2018

Others

Apex Legends on Nintendo Switch launches March 9 (link)
  • The studio is announcing the release date for season 8 of its battle royale shooter, and that may include the release date for the game on Nintendo’s hybrid home/handheld console
  • Apex Legends hits Switch on March 9, according to a press release posted by a Japanese gaming news site
  • Developer Panic Button is overseeing development of the Switch port of Apex Legends
Wildlife Studios opens Never Forget Games studio in San Francisco (link)
  • Never Forget Games is the first game studio that Wildlife Studios has set up beyond its core company, which has employees working on both games and publishing infrastructure
  • Wildlife Studios recently raised $120M at a $3B valuation on the strength of its mobile games such as Sniper 3D, Zooba, Tennis Clash, and War Machines
  • Over nine years, Wildlife has launched more than 60 games, and has grown to more than 850 employees
  • Wildlife CEO Victor Lazarte said in an interview with GamesBeat that Ray Mazza and Michael Duke will lead the new studio in San Francisco
Overwatch 2 and Diablo IV won’t release until 2022 (link)
  • Activision Blizzard, the developer of the two games announced that it does not expect either game to be a part of its 2021 financials
  • The Company noted that Blizzard will be releasing new projects during 2022

Gaming Public Multiples

Feature-Image-Wk-02

GGP Gaming Weekly – Week 02

Highlights

Playtika's initial valuation range is ~$9B-$10B in its U.S. IPO (link)

  • Playtika, a mobile gaming company owned by a Chinese investor group, said on Thursday it was aiming to raise as much as $1.67B in its initial public offering
  • Certain funds and accounts managed by subsidiaries of BlackRock, Caledonia, Dragoneer Investment Group, and Tiger Global have indicated an interest in purchasing up to $600M in the aggregate in shares of common stock in the offering at the initial public offering price
  • At the midpoint of the proposed range, Playtika Holding would command a fully diluted market value of ~$9.7B
  • The company has produced nine games ranking in the top 100 highest grossing mobile games in the US, based on total in-app purchases (nine months ended September 30, 2020)
Apple removes 39,000 titles from its Chinese App Store (link)
  • Apple removed 39,000 games from its Chinese App Store on December 31st, which marks the most amount of games removed by Apple in a single day
  • Apple had previously warned developers that it would remove unlicensed games in December
Riot Games unveils plans for League of Legends universe in 2021 (link)
  • Riot Games has unveiled its plans for more updates and esports events in the League of Legends universe for 2021
  • In 2021, Riot Games will take the initial steps toward building the Wild Rift esports ecosystem, creating a framework for players to compete globally and expanding on the previously announced tournaments in Southeast Asia and Japan
  • North American players will be able to access the Wild Rift open beta beginning in early 2021

M&A and Capital Raising

Roblox Raises $520M led by Altimeter Capital and Dragoneer Investment Group (link)
LionTree served as exclusive financial advisor to Warner Music Group on its strategic investment in the round
  • The Series H funding values the company at $29.5B and the proceeds from the financing will advance Roblox’s growth initiatives and mission to build a human co-experience platform that enables shared experiences among billions of users
  • The Company intends to go public via direct listing after raising $520M in its Series H
Niantic acquires Mayhem to boost social gaming communities (link)
  • Pokémon GO creator, Niantic, has acquired social gaming community platform Mayhem
  • Mayhem was founded in San Francisco in 2017 with the goal of bringing gamers together through live interactive experiences
  • Niantic CEO, John Hanke, said in a blog post that Mayhem team’s expertise in designing social gaming experiences and online community building will help Niantic drive new ways to connect its global community of players
  • The majority of Mayhem’s team will join the Company, including Mayhem CEO Ivan Zhou, who will be part of Niantic’s social platform product team
Nintendo acquires Luigi’s Mansion 3 developer Next Level Games (link)
  • Nintendo announced that it is acquiring Luigi’s Mansion 3 developer Next Level Games
  • The Vancouver-based studio will join Nintendo’s first-party teams like Retro Studios and Nintendo Software Technology as a wholly owned subsidiary
  • Luigi’s Mansion 3 has surpassed 8M copies sold and was the No. 15 best-seller in the US in November
  • This is the first acquisition for Nintendo since Monolith Software in 2007
Epic Games acquires RAD Game Tools (link)
  • Unreal Engine creator Epic Games has acquired software development firm RAD Game Tools
  • RAD’s offerings have been used in around 25,000 games, including Epic's flagship title Fortnite
  • The acquisition will not prevent RAD Game Tools from continuing its work with other companies, across TV, film and games
Nordisk Games acquires 40% of MercurySteam (link)
  • Danish media giant Nordisk Games has acquired 40% of Spanish developer MercurySteam for an undisclosed sum
  • MercurySteam has previously worked on Castlevania: Lords of Shadow and the Metroid series, and in 2017 began developing its own episodic game Raiders of the Broken Planet, which was later rebranded as Spacelords

Others

Among Us clone 'Werewolf Among Us' accumulates 663k lifetime downloads (link)
  • A clone of social deduction mega-hit Among Us known as 'Werewolf Among Us', developed by Shenzhen Youliang Technology, has generated an estimated 663,000 in mobile downloads, according to Sensor Tower
  • Werewolf Among us has gone on to top the free game download chart on the App Store in China, since launching in the country on October 28th, 2020
Niantic brings The North Face x Gucci collection to Pokémon GO (link)
  • Niantic has collaborated with The North Face x Gucci collection to bring cosmetic items to Pokémon GO
  • The items can be collected from 100 PokeStops around the world, and players can match their in-game character by buying the items in person

Gaming Public Multiples

GGP Gaming Weekly - Wk 52

GGP Gaming Weekly – Week 52

Highlights

Apple’s China App Store Sheds Videogames as Beijing Tightens Internet Control (link)

  • Apple is removing thousands of gaming apps from the App Store in China as the government is enforcing restrictions on various types of content
  • Earlier in December, Apple warned Chinese game developers that a new wave of paid gaming apps was at risk of removal from its app store and asked developers to submit proof of a government license
  • In 2019, Apple had 272,000 games in its China App Store and has removed at least 94,000 game apps in 2020, far exceeding the 25,000 game apps taken down in 2019

KamaGames hits 150M unique users across its library (link)

  • Social casino games Company KamaGames has hit 150M unique users across its portfolio, with help from its most successful games, Pokerist and BlackJackist
  • The Company’s most recent non-social casino release, Durak, has outperformed expectations with 1.5M downloads after entering soft launch earlier this year

M&A and Capital Raising

Blackstone to make ~$400M majority investment in mobile app marketer Liftoff (link)

  • Blackstone has agreed to invest ~$400M in mobile app marketing optimization platform Liftoff, resulting in a majority stake in the Company
  • California-based Liftoff was founded in 2012 with a focus on mobile app marketing and today delivers more than a billion ads each day to users in 90 countries and across more than 500,000 mobile publishers
  • Roughly half of Liftoff’s business is catered to mobile games

Moon Active acquires Family Island mobile game maker Melsoft (link)

  • Israel-based Moon Active announced the acquisition of Cyprus-based mobile game company Melsoft, the developer of Family Island and MyCafe
  • Melsoft has an annual revenue run-rate of more than $160M
  • Moon Active’s flagship Coin Master game is ranked as the fourth highest-earning mobile game in the world for 2020, and has surpassed $1B in revenue to date

ByteDance is looking to acquire mobile games publisher CMGE, according to Reuters (link)

  • ByteDance is rumored to be in talks to purchase mobile games publisher CMGE Technology Group, according to Reuters
  • ByteDance is allegedly seeking to buy the 27.6% stake in GMGE that is held by Fairview Ridge Investment, which is said to be worth $275M
  • The TikTok parent company has previously stepped into the games industry through the launch of a new mobile games storefront and publishing arm

Mag Interactive acquires Swedish studio Apprope (link)

  • Mobile games specialist Mag Interactive has acquired Swedish studio Apprope for upfront cash consideration of ~$6M with additional consideration of ~$6M depending on profit performance over the next 3 years
  • Apprope is best known for its word-based title Word Bubbles, which has generated ~$12M, and its games have been downloaded 55M times
  • Recently, Apprope released Word Mansion, and has seen a significant increase in sales and downloads

Voodoo acquires Paris-based studio OHM Games (link)

  • French mobile games specialist Voodoo has acquired Paris-based studio OHM Games for an undisclosed transaction value
  • Voodoo and OHM were partners prior to merging and published four titles together in 2020
  • OHM Games is best known for mobile titles including Knock Balls, Push 'em All, Knock 'em All, Bullet Rush and Shortcut Run, with its portfolio of games achieving over 260M downloads to date

Others

Rovio names Alexandre Pelletier-Normand as its new CEO (link)

  • Finnish mobile games specialist Rovio has named current Executive Vice President for Games, Alexandre Pelletier-Normand, as its new CEO
  • Current Rovio CEO, Kati Levoranta, confirmed she would step down from the role in October

Navi esports club launches ‘metaverse’ with DMarket in-game trading platform (link)

  • Esports club Navi, is launching a new gaming portal, or “metaverse,” with the help of blockchain-based game tech company DMarket
  • Navi will launch NaviNation, which lets fans craft, sell, and buy digital assets and receive rewards and gifts from the team and partners
  • The project is powered by the software application Drop, developed by Los Angeles-based DMarket

Gaming Public Multiples

Feature-Image-Template-wk-51

GGP Gaming Weekly – Week 51

Highlights

Roblox Delays IPO Until Next Year (link)

  • The Company has decided to delay its initial public offering until next year, in response to the enthusiastic market reaction for the DoorDash and Airbnb IPOs this past week making it difficult to price shares accurately
  • The Company’s co-founder and chief executive, David Baszucki, announced the decision in a memo to employees on Friday, saying that waiting provided “an opportunity to improve our specific process for employees, shareholders and future investors both big and small.”

Cyberpunk 2077 has already recouped its development costs (link)

  • The game has already achieved high ratings throughout the Gaming industry, however CD Projekt’s stock traded down ~25% in the week leading up to announcement
  • In a memo issued last week, CD Projekt — the parent company of developer CD Projekt Red — said that its revenue from digital pre-order sales alone exceeds all of Cyberpunk 2077’s production costs and all of the Company’s marketing and promotional costs for the game this year
  • In a series of tweets issued on Thursday, CD Projekt announced that Cyberpunk 2077 had been pre-ordered more than 8M times
  • The Company also announced that sales of Cyberpunk 2077 on Steam crossed the $50M mark “over 2 weeks ago,” meaning that from that point forward, it has been receiving 80% royalties from the platform

Mobile game and app spending will grow 25% to $112B in 2020 (link)

  • Mobile game and app spending will grow 25% to $112B in 2020, according to year-end estimates from mobile data and analytics researcher App Annie
  • $0.65 of every dollar spent went to iOS, spend on Google Play will grow close to 30% in 2020
  • In gaming, the standout successes were Among Us, My Talking Tom Friends, Roblox, and Call of Duty: Mobile. My Talking Tom Friends was one of the few new games to penetrate the top-10 lists
  • Roblox also broke into the top 10 apps by consumer spending in 2020. Call of Duty: Mobile surpassed nearly a billion hours on Android phones in the peak month of its first year (October)

Consoles set new records in November Launch (link)

  • PlayStation 5 and Xbox Series X launched last month, and they helped set a new November record, according to industry-tracking firm The NPD Group
  • Despite performance of the PlayStation 5 and Xbox Series X, Nintendo Switch sales have maintained high numbers, selling more than 1.3M units in November
  • Consumers spent a November record $1.4B on new video game hardware, a 58% increase compared to a year ago
  • Growth was driven by the launches of the PlayStation 5 and Xbox Series X/S. YTD hardware spending reached $4B, 34% higher than a year ago

Minecraft racks up the most views of any game on YouTube in 2020 (link)

  • Mojang's Minecraft was the most-watched game on YouTube this year, with 201B views on the platform in 2020
  • Roblox came in second place with 75B views and Garena Free Fire finished in third with 72B views
  • YouTube Gaming surpassed 100B of hours watched across more than 40M channels dedicated to gaming in 2020

Project xCloud is coming to iOS devices in Spring 2021 (link)

  • Microsoft's Project xCloud, the Company’s cloud gaming service, will enter beta on iOS devices next year
  • Project xCloud was initially available on iOS via the App Store in beta earlier in 2020, but was removed after Apple determined that the application breached App Store policies
  • Microsoft’s cloud gamming service will also enter new markets including Australia, Japan, Brazil, and Mexico in spring 2021

Google releases Stadia in eight European countries, including Poland and Portugal (link)

  • Google has launched its Stadia streaming service in more European countries, including Austria, the Czech Republic, Hungary, Poland, Portugal, Romania, Slovakia and Switzerland
  • In total, Stadia now works in 22 countries

Control has sold over 2M copies (link)

  • Control debuted in August 2019. It is available for PlayStation 4, Xbox One, Switch, and PC. PlayStation 5 and Xbox Series X/S versions are coming in 2021
  • Bigger has a strong profile, with four casual games that have already been downloaded more than 75M times in the past year. These have already made the company profitable
  • In 2019, 60% of Controls sales were digital. In 2020, that skyrocketed up to 90% as social-distancing gamers were happier staying at home and avoiding brick-and-mortar stores

The Last of Us Part II and Among Us win game of the year  (link)

  • The Last of Us Part 2 won game of the year among other categories, including best game direction, narrative, and action & adventure game
  • Other award winners included Final Fantasy VII Remake for best role-playing game and best score and music, with popular lockdown hit Among Us winning best multiplayer and best mobile game

M&A and Capital Raising

According to Sky News, EA has allegedly entered the race to acquire Codemasters alongside Take-Two (link)

  • Electronic Arts, which already owns a UK racing studio in the form of Need for Speed and Burnout developer Criterion, is expected to be revealed as an interested party
  • Take-Two had had already reached an agreement over the terms of the offer, which valued the publicly owned company at $956M
  • EA and Take-Two are the two biggest sports games publishers in the world, and both will be eyeing Codemasters’ hit F1 racing series, which has expanded into esports in recent years and continues to grow in popularity

Modern Times Group acquires mobile studio Hutch (link)

  • Modern Times Group has acquired racing-focused mobile games developer and publisher Hutch in a deal worth up to $375M, implying a ~5.0x revenue multiple and ~21.1x EBIT multiple
  • Consideration for the deal consists of a $275M upfront cash payment and up to $100M of performance-based payments
  • The acquisition has been made through MTG's new holding company GamingGo, which was announced recently alongside increased investment in German games developer InnoGames

Zynga’s Rollic division buys Onnect game for $6M (link)

  • Zynga recently acquired Turkey’s Rollic for $16M, and now Rollic is turning around and buying the matching game Onnect from Chef Game Studio for $6M
  • Onnect has been acquired in full for a closing payment of $6M and a potential future payment of $1M, based on terms and conditions agreed upon by the parties
  • Onnect is a connection-based pair-matching game with challenging levels

Bigger Games raises $6M as Turkey’s startup market heats up (link)

  • Bigger Games has raised $6M to make mobile games as Turkey’s startup market continues to grow
  • Bigger has a strong profile, with four casual games that have already been downloaded more than 75M times in the past year. These have already made the Company profitable
  • The funding comes from Index Ventures, the backer of Roblox, King, Supercell, and Discord. Play Ventures (who backed the company in the pre-seed round), Unity founder David Helgason, and ex-King chief operating officer Stephane Kurgan also participated in this round

Aglet raises $4.5M to make a mobile game out of sneakers (link)

  • The Company, based in Los Angeles and Dusseldorf, Germany, calls itself the developer of a sneaker and culture-focused spatial commerce experience
  • Aglet has now raised $7M since its founding in late 2019
  • Sapphire Sport led the round, with participation from existing investors Lakestar Ventures and Forecast Ventures. Notable angels Matt Miesnieks (6D.ai, Niantic Labs), Nate Mitchell (co-founder Oculus, Mountaintop Studios), and Greg Castle (Anorak Ventures) also participated in the round

Salad Technologies raises $3.2M (link)

  • Salad hopes this plan will position it to define the future of distributed computing at a time when the industry has a voracious appetite for computing power
  • In the past couple of years, Salad has amassed 250,000 computer users, and that user base has generated 1,000 years of compute time. Carthona Capital led the round with additional participation from Kickstart Seed Fund and Royal Street Ventures

New studio Core Loop secures $2.4M (link)

  • Game developer Core Loop has secured $2.4M in funding to create a cross-platform MMO
  • The round featured participation from Galaxy Digital, 1Up Ventures, Initial Capital, Dune Ventures and Sisu Games
  • Core Loop is led by Vincenzo Alagana and Dan Chao
  • Alagana has gained experience on both console and mobile in a career spanning 20 years, and was once the president and CTO of Game of War developer Machine Zone

ForeVR raises $1.5M and unveils VR bowling title (link)

  • The startup has raised $1.5M, and its first game is a VR bowling title
  • The company was founded by industry vets Marcus Segal and Mike Pagano Doom, who both worked at Zynga. They are developing their first game, which is scheduled to be released in early 2021 on Oculus VR headsets

Bombay secures $1M in funding from Lumikai (link)

  • Bangalore-based developer Bombay Play has secured $1M in seed funding from India-based venture capital fund Lumikai
  • Playco and Zynga co-founder Justin Waldron joined the board of directors for Bombay Play
  • Bombay Play has already seen 10M downloads for its first multiplayer game, Card Party

Wizard Games secures investment from Tencent (link)

  • Chinese games studio Wizard has secured an undisclosed investment from Tencent
  • With the proceeds raised, Wizard plans to build upon its development team, as well as build its portfolio of online games across all platforms
  • The studio’s leading title, Battle Teams, has accumulated 500M users worldwide, with its sequel, Battle Teams 2, expected to be released in 2021
  • Despite its shooter focus Wizard has created a new sandbox title dubbed Sea of Craft, it is scheduled to be released in 2021

Modern Times Group increases its investment in InnoGames (link)

  • Modern Times Group has increased its controlling stake to 68% in mobile games developer InnoGames
  • Modern Times Group can purchase an additional 17% of the company for $128M
  • In November 2019, the German games studio surpassed $1B in lifetime revenue

Others

Pokémon GO’s February 20 event will celebrate beloved Kanto region (link)

  • Pokémon GO‘s next big online event will take place on February 20 as the company celebrates the game’s fifth anniversary with a return to the Kanto region
  • This is another example of how the publisher is shifting to a hybrid status for its location-based game, where players can play individually in physical spaces while gathering in large groups through online play
  • During the 12-hour virtual event, all 150 Pokémon originally discovered in the Kanto region will be available as Shiny Pokémon, some for the first time

World of Warcraft: Shadowlands breaks record for biggest PC game launch (link)

  • Blizzard Entertainment announced today that World of Warcraft’s latest expansion, Shadowlands, sold over 3.7M copies on its launch day, November 23
  • This breaks the record for biggest launch day for any PC game, beating out the 3.5M copies Blizzard’s own Diablo III managed back in 2012
  • World of Warcraft has been gaining players this year as social distancers have looked for a virtual world to escape to

Halo: Infinite is launching next fall (link)

  • Halo: Infinite isn’t coming in the spring or summer. Developer 343 Industries is now aiming to launch the game in the fall 2021, according to a blog post from director Joseph Staten
  • This is the first time that anyone from Microsoft has given a new release window for the game

JJ Abrams’ Bad Robot launches internal game studio headed by Left 4 Dead creator (link)

  • The entertainment Company run by the Star Wars filmmaker has hired Michael Booth, a veteran game creator behind hits such as Valve’s Left 4 Dead
  • The Santa Monica, California-based Bad Robot Games will now have two different businesses that Sweet will manage
  • It will work on co-development deals with external game partners, and it will also make its own games under the studio headed by Booth, who previously worked at Valve, Blizzard Entertainment, Facebook, and Electronic Arts

Left 4 Dead successor Back 4 Blood launches June 22 (link)

  • Developer Turtle Rock announced that Back 4 Blood, the spiritual successor to the Left 4 Dead series, is coming out on June 22
  • An alpha will launch next week, as the studio announced today at The Game Awards
  • Turtle Rock created Left 4 Dead under Valve back in 2008. The game became popular thanks to its four-player cooperative shooting. It had one sequel in 2009, but the series has been dormant since then

Pearl Abyss’ Crimson Desert will debut in the winter of 2021 (link)

  • Pearl Abyss revealed a new gameplay trailer for Crimson Desert at The Game Awards today. The open-world massively multiplayer role-playing game is coming out for PC and consoles in winter 2021

Microsoft Flight Simulator is coming to Xbox Series X/S in summer 2021 (link)

  • This means a new audience will get a chance to experience its realistic flight models and lifelike replication of Earth on Xbox Series X and S
  • Asobo is focusing on Xbox Series X/S. That means no plans for Flight Simulator for the Xbox One have been made yet

The Elder Scrolls Online’s next expansion is Gates of Oblivion (link)

  • Bethesda revealed the next expansion for The Elder Scrolls Online during The Game Awards today, and it’s Gates of Oblivion. It will release in 2021
  • Developer ZeniMax Studios Online also announced that a better look at Gates of Oblivion will happen during a premier event on January 21
  • The Elder Scrolls Online debuted in 2014 and has a dedicated following thanks to the release of constant updates and expansions. The last expansion, Greymoor, came out this May

Rovio has cancelled development of its new turn-based RPG Angry Birds Legends (link)

  • Rovio has cancelled development of its new turn-based RPG Angry Birds Legends
  • Rovio confirmed that the previously soft-launched title was not where they wanted it to be and therefore felt a full release was not warranted
  • The Company similarly halted development of Angry Birds Tennis following an unsuccessful soft-launch period in October 2020

2K launches NBA SuperCard globally as WWE SuperCard crosses 21M installs (link)

  • 2K Games has launched NBA SuperCard, a F2P mobile collectable card battle game, on iOS and Android devices globally
  • NBA SuperCard was developed by Cat Daddy Games, and previously developed WWE SuperCard which has reached 21M global downloads since its August 2014 launch
  • Cat Daddy Games has already utilized its NBA license to create NBA 2K Mobile and MyNBA 2K21

Gaming Public Multiples

Feature-Image-Template-week-50

GGP Gaming Weekly – Week 50

Highlights

Americans of all ages are spending more on video games (link)

  • People across all demographics are playing more games at higher frequencies, especially on mobile, but this trend also includes Nintendo, PlayStation, and Xbox
  • An NPD report found that 4 out of 5 consumers in the US played a game in the last six months, and these consumers are spending 26% more time and 33% more money on games than in the same period last year
  • Spending on video games for Americans 45 years old to 54 years old increased 76% while Americans age 55 to 64 increased their spending 29%

Call of Duty hits $3B in bookings in 2020, and Warzone’s Cold War version has been moved to December 16 (link)

  • According to Activision Blizzard, net bookings for Call of Duty crossed $3B in 2020 and the new Call of Duty: Black Ops — Cold War version of Warzone has been delayed from December 10th to December 16th
  • Year-to-date increases for the Call of Duty franchise include net bookings up over 80% and units sold through up over 40% YoY
  • Over 200M people have played Call of Duty this year

Sony doubled TV ad spend for PlayStation 5 launch (link)

  • Gaming brands have increased their TV ad spend in preparation for the holidays: November saw a 77% increase in estimated outlay, increasing to $50M from October’s $28M
  • Over half of this increase is from PlayStation’s heavy promotion of the PlayStation 5 and Call of Duty: Black Ops — Cold War
  • In total, 14 brands aired 75 spots over 4,900 times, resulting in 1.9B TV ad impressions
  • Behind Sony, top ad spenders include Microsoft, Nintendo, Activision Blizzard, and EA

Animal Crossing: New Horizons becomes the fastest-ever game to sell six million copies in Japan (link)

  • According to Game Data Library, Nintendo's Animal Crossing: New Horizons has surpassed six million sales in Japan and is the fastest game to surpass this barrier
  • Animal Crossing: New Horizons is the only the fifth game to hit this milestone in the Japanese market

Fortnite sees a record 15.3M players at the end of its Marvel event (link)

  • Fortnite experienced a record 15.3M concurrent players during the finale of the battle royale Marvel event with an additional 3.4M tuning in through YouTube and Twitch
  • While the Marvel event is over, Epic Games signaled that Fortnite has years to go with its hero-based storyline

Roblox given the go ahead to enter China (link)

  • As reported by the South Morning China Post, Roblox has received a greenlight to enter the Chinese market
  • Tencent will publish the game in China and received licenses for both Mobile and PC, but no release date has yet been provided

Genshin Impact brings in nearly $400M in first 2 months on mobile (link)

  • According to Sensor Tower, Genshin Impact has brought in an estimated $393M in the first two months after its September 28 launch
  • Genshin Impact was the #2 game in terms of generating revenue in the world, behind Tencent’s Honor of Kings
  • The game’s success is global and signals that mobile players are looking for more substantial RPGs that can rival PC/Console offerings

M&A and Capital Raising

Swedish-based EG7 acquires Daybreak Game Company for $300M (link)
LionTree advised Daybreak Game Company on its sale to EG7

  • Daybreak is a San Diego, CA based leading MMORPG video game developer and publisher
    • The Company possesses globally recognized third-party IPs, combined with valuable original IPs
    • The Company has deep expertise in the free-to-play and games-as-a-service business model, and their games feature a loyal user base comprised of ~178M registered users
  • EG7 is a Sweden-based group of companies that develops, markets, publishes, and distributes video games for PC, Console, and Mobile
    • The Company owns a portfolio of other game developers, ad businesses, and software development companies including Big Blue Bubble, Piranha Games, Sold Out, Antimater Games, and others
  • The transaction represents a large addition to EG7’s portfolio
    • Transaction Value: $300M
      • $260M Up-Front Consideration ($160M cash / $100M stock)
      • $40M Deferred Cash Consideration
      • 9.7x Transaction Value/2020E EBITDA
      • As means to raise additional capital, EG7’s Board of Directors intends to carry out a new issue of shares in EG7 that amount in up to ~$190M through an accelerated bookbuilding procedure
      • Additionally, the Company has secured two debt facilities resulting in ~$110M in available capital
    • The transaction increases the size and profitability of EG7 with Daybreak’s loyal communities for existing IPs
    • Daybreak offers future upside through upcoming content releases, synergies across the group, and a strengthened team to identify and execute further M&A

Gaming platform Roblox acquires Imbellus assets ahead of IPO (link)

  • Imbellus, based in Los Angeles, develops simulation-based tests that measure human thought processes
  • The Company, which was valued at $57.5M in a 2018 private fundraising round, has talked publicly about its application as a substitute for standardized U.S. tests such as the SAT college entrance exam

EG7 acquires MechWarrior creator Piranha for $24M (link)

  • Canadian games studio Piranha has been acquired by EG7 for ~$24M, with consideration of ~$16M in cash and ~$8M in EG7 stock
  • Piranha will remain an independent entity within EG7
  • Piranha’s top game, MechWarrior Online, has generated ~$60M in revenue since its release in 2013

Bigger Games secures $6M in seed funding (link)

  • Istanbul-based mobile studio Bigger Games has raised $6M in seed funding
  • The round was led by Index Ventures with additional participation from Play Ventures, Unity founder David Helgason, and former King COO Stephane Kurgan
  • Bigger Games was founded by three former members of Peak Games and has achieved 75M downloads
  • The Company will use the proceeds for development of additional casual puzzle titles

Microsoft acquires esports events firm Smash.gg (link)

  • Microsoft has acquired esports events platform Smash.gg for an undisclosed amount
  • Smash.gg indicated that current operations will be unaffected and that the platform will benefit from additional resources and support as part of the Microsoft Content Services team

Others

Dauntless studio Phoenix Labs adds new studios, ramps up work on new games (link)

  • Dauntless developer Phoenix Labs keeps growing, as it announced the establishment of new studios in Montreal and Los Angeles
  • The Company added 50 employees during 2020 and expects to have over 250 employees by the end of 2021
  • André Roy, previously at Ubisoft, will lead the team at the Montreal studio and Omar Kendall, previously at Riot Games, will be product director at the Los Angeles studio, while Phoenix Lab’s Jing Wang will serve as general manager

Supercell cancels new casual match-three puzzler Hay Day Pop (link)

  • Supercell has cancelled the development of its previously soft-launched match-three puzzler Hay Day Pop saying that the game did “not meet the standards” of the Company
  • Hay Day Pop, a casual game, is different from the Company’s traditional portfolio of hardcore games

Krafton consolidates Pnix and Delusion Studio to form RisingWings (link)

  • South Korean games firm Krafton has consolidated Pnix Inc. and Delusion Studio into a new mobile-focused studio named RisingWings
  • The newly formed studio will focus on casual and midcore mobile titles while maintaining focus on previously developed titles including Golf King - World Tour and MiniGolf King

Sony teams with Epic to bring Kratos to Fortnite (link)

  • PlayStation has teamed up with Epic Games to bring its iconic character Kratos, from the God of War franchise, to Fortnite
  • The character can now be purchased as an in-game skin across all platforms, with additional Kratos-related content exclusive to PlayStation players

Gaming Public Multiples