After a busy first half of 2017, mobile gaming M&A activity has moved from too-hot-to-touch to a still very warm simmer. Here’s our summary of recent mobile gaming M&A activity.
The biggest recent news is Tencent’s rumored acquisition of Angry Birds developer Rovio, for an amount reported to be around $3 billion. There’s speculation that Tencent’s shareholders might balk at this, given the massive multiple (154x!) on Rovio’s EBIT this price would represent. Rovio, for its part, put out a statement that didn’t deny Tencent’s interest, but that basically said, “all options are on the table”.
Meanwhile, Tencent did take a small stake (2%) in Ourpalm, for an amount reported to be just shy of $72 million. The deal cements Tencent’s partnership with Ourpalm, a Chinese game developer which has previously worked with Tencent to publish its titles.
Across the world, Sweden’s MTG purchased online game site and game publisher Kongregate from GameStop for $55 million. This is MTG’s second “big” gaming acquisition … Innogames was their first, in 2016.
As the games industry continues its steady marches into mobile, particularly mobile in China, it’s not surprising to see Tencent continue to play such a huge role in driving investment activity across the industry. Given the multiples of revenue and EBIT that Tencent appears to be willing to pay for leading companies like Supercell and Rovio, they will undoubtedly remain one of the most important players in this space for the foreseeable future.