This article is based on our Weekly News Digest #25 from 28.06.2021. If you want to receive such analyses first, be sure to subscribe to our weekly newsletter. There, we analyze the largest deals, elaborating on the financials and strategy behind, while also covering the smaller transactions of the week.
? Acquisition
- China-based tech giant Tencent Holdings Ltd. (SEHK: 700) has acquired a majority stake of German PC&console game developer Yager. The amount of the transaction remains undisclosed
- In Feb’20 Yager already received a minority investment from Tencent that went towards its current projects
? Product
- In 2003, Yager released a combat flight simulator of the same name as its developer. The game didn’t sell well and received average reviews
- In 2012, the company released Spec-Ops The Line, a third-person shooter that later earned a cult following for its strong narrative but was a commercial failure
- In 2017, F2P combat flight simulator Dreadnought was released to receive mostly positive reviews
- In 2018, Yager announced a F2P shooter The Cycle. The developers defined the genre of the game as competitive quest shooter or PvEvP. The company seems to have high hopes for this project as it brings innovative elements into the extremely popular genre of battle royale
? Strategic Rationale
- After the acquisition, Yager will be able to tap into Tencent’s development and publishing resources, which may help the studio achieve mainstream success with The Cycle
- Tencent’s expertise in multiplatform releases may help The Cycle reach other platforms (currently, only PC release has been confirmed)
- Tencent’s first minority stake investment into Yager followed the release of The Cycle in early access in 2019. The game might be the reason Tencent decided to go through with the acquisition assuming the company believes in The Cycle’s future success and profitability
- Tencent’s acquisition of Yager will strengthen the company’s position in the European market as Tencent follows its established M&A strategy
? Previous investments/M&As
- Tencent has been making many investments and M&As of various sizes with a focus on PC&console developers and gaming ecosystems:
- A total of 28 transactions in 2020 10 of which went towards gaming companies from Europe
- In 2021 the number of Tencent’s deals already reached 50 with 8 of the targets being from Europe
- Among the biggest investments into European companies are:
- minority stake acquisition of Czech game developer behind DayZ and Arma franchise Bohemia Interactive (the amount remains undisclosed);
- investment of €30m into DontNod Entertainment, France-based company known for such games as Remember Me, Vampyr, and Life is Strange franchise; the companies also entered a business cooperation agreement;
- minority stake acquisition of France-based mobile game developer and publisher Voodoo for $568m
- acquisition of Norway-based online multiplayer game developer and publisher Funcom for $114m
- acquisition of Israel-based mobile casual game developer and publisher Ilyon Dynamics for $100m
Sources: GAMESINDUSTRY
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25 June 2021
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This article is based on our Weekly News Digest #25 from 28.06.2021. If you want to receive such analyses first, be sure to ...
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