Weekly News Digest #40

Technicolor Creative Studios goes public at $1B+ valuation

Technicolor Creative Studios (Euronext Paris: TCHCS), a newly formed company comprised of MPC, The Mill, Mikros Animation, and Technicolor Games, has spun out of its parent company Technicolor and went public on Paris Euronext Stock Exchange at $1B+ valuation.

Technicolor Creative Studios former parent company Technicolor is now called Vantiva and comprises two divisions: Connected Home and Vantiva Supply Chain Services. As a result, Vantiva will specialize in set-top boxes and supply chain services, while Technicolor Creative Studios will take the core services of the former company and focus on tech outsourcing for creative industries. After the spin-out, Vantiva will own 35% of Technicolor Creative Studios, while the remaining 65% will be released into the market.

Technicolor Creative Studios former parent company Technicolor was founded back in 1915 as a tech provider for the cinema industry. The company started out at the very beginning of color filming, and eventually evolved into an international corporation that provides tech creative solutions for communication, media, and entertainment industries.

One of the areas the company specialized in was VFX technologies, which led to the eventual acquisition of three companies: MPC (2004; $76m), The Mill (2015; $336m), and Mikros Animation (2015), as well as the creation of Technicolor Games in 2007. Together, the four studios now form Technicolor Creative Studios.

Right after its foundation in 2007, Technicolor Games began working on EA’s FIFA franchise and thereafter participated in the development of each iteration of the legendary game series. Over the last 15 years, the company has worked on 100+ gaming titles, with some of the most notable IPs being Call Of Duty, Grand Theft Auto, Madden NFL, Resident Evil, Mortal Kombat, and many others. As for MPC, The Mill, Mikros Animation, the studios have worked on such movie IPs as Harry Potter, Cruella, Top Gun Maverick, and Sonic The Hedgehog.

The four divisions of Technicolor Creative Studios are going to be powered by the same technology, share their experience with each other, and together invest in R&D and future platforms. The company will provide its clients with full IP development services, assisting with the creation of games, films, and marketing campaigns. Moreover, Technicolor Games can collaborate with MPC, The Mill and Mikros Animation on developing projects on the verge of gaming and cinema.

The deal is yet another sign of the transmedia and IP-centric approach being one of the key trends  in today’s gaming company. Over the last few years, we saw companies like CD Projekt, Riot Games, Ubisoft, Valve, and many others expanding their gaming IPs further via animated series, films, board games, comics, and other media. Apart from transmedia initiatives, the combined expertise of Technicolor Creative Studios can also be used for cinematic trailers, marketing campaigns, and so on. Moreover, gaming engines are more and more used for VFX in films and TV — the best-known examples are Sony Pictures using Unreal Engine for The Mandalorian production, and Unity acquiring VFX company Weta Digital (co-founded by Peter Jackson) for $1.625B. This all means that the creative industries are getting increasingly interconnected, both in terms of its audiences and the technologies they use; the now publicly traded Technicolor Creative Studios is yet another sign of that.

We want to thank Hiro Capital and The Games Fund for supporting this digest.

 VENTURE FINANCING

Russia-based tech giant VK (MOEX: VKCO) announced the selling of its international game developer and publisher MY.GAMES to Alexander Chachava — a serial entrepreneur and managing partner at Cayman Island-based LETA Capital, a VC company that invests in software-related startups. The cost of the deal is $642m. Under the terms of the deal, Chachava will receive all business assets of MY.GAMES, including all of its subsidiaries and assets. LETA Capital didn’t have any gaming-related companies in its business before MY.GAMES acquisition.

US-based esports organization FlyQuest Sports has been acquired by the US-based Viola family office, the owners of NHL team Florida Panthers. The financial terms of the deal are not disclosed. Michael Choi will remain CEO and continue to lead the company. As a result of this deal, Viola family will enter the esports segment in addition to the classic sports business in its portfolio.

Sweden-based gaming company M.O.B.A. Networks is acquiring US-based LoLwiz, one of the largest in-game applications for League of Legends. The company will pay $900k fully in cash. The deal will allow M.O.B.A. to add more expertise in app-monetization to its current structure and increase its offer for LoL players.

Saudi Arabia-based gaming company Savvy Games Group revealed its plan to spend $37.8B for the investment in the gaming market, including $13B for the acquisition of a major publisher. The company made several significant deals this year including $1B investment in Embracer, purchase of 5.01% stake in Nintendo, and others. 

 VENTURE FINANCING

UPDATE: US-based entertainment and esports company FaZe Clan which went public in Jul’22, revealed that $71.4m of its $100m backstop commitments defaulted on their obligations. B. Riley, the sponsor of the SPAC company who merged with FaZe, confirmed it will provide FaZe with $53.4m funds to partially compensate for defaulted $100m. 

US-based virtual concert platform AmazeVR has raised $17m in Series B funding. The round was led by Mirae Asset Capital, with participation from GS Futures, LG Technology Ventures, Krafton, and others. The company plans to use new funds to expand partnerships with artists, management agencies, labels, and publishers.

China-based cloud rendering startup Well-Link Technologies has raised $40m in the latest funding. The round was led by Singapore-based VC fund Temasek, with participation from  Future Capital, VGC, and others. The funds will be used for both improving the software and hardware of integrated real-time cloud rendering, and constructing the next-gen computing and rendering architecture.