24 Jan — 30 Jan / 2022

Weekly News Digest #5


# of announced deals
announced deals’ size
# of closed deals

Nexters acquires Cubic Games, RJ Games, and Royal Ark for up to $125m


Nexters acquires Cubic Games, RJ Games, and Royal Ark for up to $125m

M&A deals Cubic Games, RJ Games, Royal Ark

Cyprus-based mobile & social network game developer Nexters (NASDAQ: GDEV) has announced the acquisition of three gaming companies for a total amount of up to $125m.

Cubic Games 

Mobile gaming company Gracevale owns Cubic Games, the publisher of Pixel Gun 3D. For the development of the game, the company also hires third-party mobile games developer Lightmap Studio. Nexters will acquire both Gracevale and Lightmap Studio for a total of $70m on a cash and debt-free basis, including the initial consideration of $59.5m and an earn-out payment of $10.5m. Some part of the total consideration will be paid with Nexters’ newly issued shares. The transaction is expected to be closed in Q1’22.

Pixel Gun 3D — a mobile shooting game, which has been downloaded over 170m times since its release in 2013. In 2021, the game had around 5.5m monthly active users. Overall, there are over 90 people working on Pixel Gun 3D.

In 2021, Cubic Games is expected to generate around $26m of bookings according to the company’s unaudited non-IFRS management accounts. After the deal is complete, the team will continue to work on its main title, while also building up its own UA function, using Nexters’ expertise in marketing and analytics. Lightmap Studio will also continue to focus on developing Pixel Gun 3D.

Pixel Gun 3D AppMagic

*Source: AppMagic

RJ Games

Founded in 2013, RJ Games is currently owned by MX Capital. Nexters will acquire 48.8% of MX Capital from Everix Investments for a total of $50m, including the initial consideration of $15m and an additional earn-out of $35m. Everix Investments is a company owned by Playrix founders. Currently, it has a 38% stake in Nexters, representing 38% of the voting rights.

The companies have also signed a pull and call option, which allows Nexters to buy the remaining stake in RJ Games from the remaining shareholder of MX Capital — MSRJ — in H1’24. The price payable according to the put and call option will depend on the achievement of agreed KPIs by MX Capital. Option arrangements also include some earn-out payments to the founders based on the company’s performance.

As a part of the deal, Nexters will also provide MX Capital with a $46m loan in four tranches, which will be secured by a pledge of shares in MX Capital owned by MSRJ. The first tranche of up to $11m will be provided on or about the completion of the transaction, while the other tranches will be provided upon the achievement of certain KPIs by MX Capital.

RJ Games has experience in casual and strategy games and is best known for its mobile game Puzzle Breakers, which combines the elements of RPG and match3 puzzles. The team of 150 people will join Nexters and continue working on Puzzle Breakers, which is currently in soft launch and is scheduled for the official release in Q2’22.

The deal opens an opportunity for RJ Games to use Nexters’ expertise in mid-core genres, marketing, and user acquisition to successfully launch and scale Puzzle Breakers on the international markets.

Royal Ark

Nexters will acquire ~49.5% of Castcrown, the company which publishes its games under Royal Ark brand, for a total purchase price of $4.95m on a cash and debt-free basis. The transaction is expected to be completed in Q1’22.

As a part of the deal, Nexters will also provide a convertible loan of up to $16m to Castcrown in two tranches. The first tranche in the amount of $7.5m will be provided on or about the completion of the transaction, while the second $8.5m tranche will be paid after Castcrown meets agreed KPIs.

The parties have signed a put and call option, which allows Nexters to acquire the remaining shares in Castcrown before Jul’26, while the put option may be exercised during the Jul’26-Oct’26 period. As consideration for the call options, Nexters will pay the remaining founders an amount not exceeding $2m. Upon execution of the options, the consideration will be paid in cash and Nexters’ newly issued shares.

There are two mobile games published under the Royal Ark brand — survival RPG Dawn of Zombies, and survival strategy Shelter War. The first game, Dawn of Zombies, was released in 2019/2020 and is still in the early stage of development. The game is created by Royal Ark, which is also the name of the development team. As for Shelter War, it was developed by Game Gears team and published in 2021. The total number of employees in both teams exceeds 170 people. In 2021, Royal Ark generated around $9m of bookings according to the company’s unaudited non-IFRS internal data.

Strategic Rationale

With this acquisition spree Nexters solidifies its position in the mid-core genre and increases its production capabilities, bringing over 410 developers under its wing. At the same time, there are some clear risks that the company will inevitably face, acquiring early-stage products. Though Pixel Gun 3D is an established game with a vast audience and a stable revenue flow, Royal Ark’s and RJ Games’ products are still in the early stage and are yet to prove their success. To diversify the risks, Nexters pays its loans only after the agreed KPIs are met and uses call options to take some time before buying the full businesses. The risks are also reduced by Nexters Boost, the initiative that supports the launch and scale of newly developed titles. Overall, the deals can increase Nexters’ target EBIT, as well as bring in several successful IPs to further diversify the company’s portfolio.

This InvestGame Weekly Digest is supported by Hiro Capital, investors in the future.



Saudi-Arabia based company Savvy Gaming Group acquires two esports organizations ESL Gaming from Sweden-based MTG ($1.05b) and UK-based FACEIT ($450m) for a combined $1.5B in an all-cash transaction. Savvy Gaming is backed by the Saudi Arabian government’s Public Investment Fund which is active in the sports segment (see Newcastle takeover). The two acquired companies will merge to create the leading global platform for competitive gaming — ESL FACEIT Group.

US-based video game software developer Unity Technologies (NYSE:U) acquires Canada-based digital character creation company Ziva Dynamics. The financial terms of the deal are not disclosed, but Unity plans to make Ziva’s tools easier to use for the developers of all levels. Ziva’s software has been used in games like Hellblade: Senua’s Sacrifice and Spider-Man: Miles Morales.

UK-based game developer and multiplatform publisher Kwalee acquires France-based narrative mobile games developer Tictales for an undisclosed amount. This is the first deal in Kwalee’s 10-years history. Tictales will continue to operate independently while benefiting from Kwalee’s marketing expertise, while at the same time Kwalee will increase its presence in both casual and hyper-casual games segments.


Singapore-based extended reality startup Refract has raised ~$6m in Series A funding. Sea Limited and others have participated in this round. The funding will be used toward the research and development of the wearable and game-oriented full-body motion capture devices called Axis.

US-based game studio Frost Giant Studios, founded by StarCraft 2 and Warcraft 3 veterans, has raised $25m in Series A funding. The majority of the funding ($20m) came from Korea-based game publisher Kakao Games, which led the round. Among other participants are Bitkraft Ventures, Global Founders Capital, and Riot Games. The funding will be used for the development of the studio’s first unannounced game.

US-based games studio Apogee Entertainment, founded and managed by the creator of Duke Nukemhas secured a $5m investment. The funding will be provided by Jack Ma’s eWTP Tech Innovation Fund. The investment will be used to hire more staff and expand the company’s business portfolio, especially in the indie-games segment.

Israel-based blockchain-powered startup Spring Games has raised $7m in Seed funding. The round was led by an Israel-based mobile games developer and publisher Playtika. Funding will go towards the development of NFT-powered games on the blockchain.

Singapore-based game development and 3D art production company Virtuos has announced the completion of the acquisition of Ukraine-based 2D and 3D art production studio Volmi Games. Financial terms of the deal are not disclosed; however, Volmi will be rebranded as Volmi — A Virtuos Studio. With this deal, Virtuos is increasing its presence on the market.