MTG to acquire GameStop's Kongregate for $55m
Nordic firm to add Kongregate to its recent InnoGames acquisition
The Modern Times Group (MTG) is in the process of acquiring mobile and social games publisher Kongregate in a deal worth $55m.
Kongregate was set up in 2006. Initially, the firm focused on social browser games and has since expanded onto mobile and Steam. It's most recently moved into games development with the acquisition of Ultrabit. In 2010, it was acquired by GameStop, and earlier this month it announced it has passed 100m mobile downloads.
MTG says that Kongregate is expected to generate $50m in sales this year, and that it made $35m in 2016. The company boasts 14m monthly active users, with over 100,000 games on its browser platform and an additional 45 titles on the app stores.
Kongregate's publishing model involves a revenue sharing agreement with developers, and MTG now plans to acquire additional studios that can achieve a bigger audience via Kongregate's platform and current audience. Some of the titles that Kongregate has supported includes AdVenture Capitalist, Animation Throwdown: The Quest for Cards, and Peter Molyneux's The Trail.
Its own development efforts via Ultrabit include the recent Office Space: Idle Profits.
Kongregate CEO and co-founder Emily Greer said: "Our vision has always been to nurture the development of indie game developers and the consumer gaming community. Our values are all about integrity, collaboration, and most of all, fun. MTG is not only a great partner as we continue to step up our expansion into new gaming platforms and channels, but the right partner because they share our values and commitment to empowering indie development teams to create unique and innovative gaming experiences for consumers across any and all game platforms."
MTG has already ramped up its games efforts by acquiring 51% of online games company InnoGames. It now plans to invest further in the online gaming space.
"This investment is in line with our strategy to invest in relevant, complementary and scalable digital content and communities," said MTG CEO Jørgen Madsen Lindemann. "Online gaming is one of our three digital entertainment verticals, and we are establishing a presence in a gaming industry expected to be worth some $130 billion in 2020, of which mobile gaming is the fastest growing segment. Almost a third of the time people spend on mobile devices each day is spent gaming. We look forward to welcoming the high quality, hugely talented and well proven Kongregate team to MTG."
MTG EVP And Benninghoff added: "[Kongregate] has a multi-platform business and a global audience network, and are now developing and acquiring their own high value game studio IP. This will enable us to screen a wide range of gaming companies at an early stage, in order to find additional investment opportunities."