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Paradox turns its eye to M&A and mobile development

Incoming chief executive Ebba Ljungerud wants ten per cent of game sales to come form mobile by 2020

Incoming Paradox chief executive Ebba Ljungerud has outlined a new strategy of mobile development and mergers and acquisitions for the Swedish developer.

Famed for deeply complex strategy games such as Stellaris and Crusader Kings, Paradox Interactive's share price has increased by 500 per cent since going public two years ago, and it has a current market value of around $2.3 billion.

Due to take over from Paradox's main owner Fredrik Wester in August, Ljungerud told Reuters that developers, publishers, and studios were all "potential targets" for expansion.

With revenues having quadrupled over four years to $36 million in 2017, Paradox has already scooped up three development houses with the acquisition of White Wolf Publishing, Triumph Studios, and Harebrained Schemes.

"Our cash is strong and we have a good valuation ... so there is room [for acquisitions]," Ljungerud said.

While Ljungerud said that Paradox is "digging in where it stands" with its success in existing markets -- particularly in the US -- the developer will also be considering growth opportunities in mobile and Asia.

Despite the company's limited experience with mobile, Ljungerud said she expects ten per cent of Paradox game sales to come from the platform by 2020.

Paradox enjoys a registered user base of over seven million, along with two million monthly active users across its portfolio of games. Given this starting point, the developer is in a strong position to tap the mobile market.

Paradox also benefits from the vote in confidence from Chinese internet giant Tencent which owns a five per cent stake in the company.

Tencent is known for casting its net wide with investments and quickly cutting lose options that didn't work out but, two years after buying up a slice, it remains invested.

Tencent is an important partner to any developer looking to enter the Chinese games market which is expected to reach $42 billion value by 2022.

"It's a giant market but it's not crystal clear which of our games will fit in Asia," said Ljungerud. "That said, it's fantastic to have a partner like Tencent that knows the market really well."

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