When you’re exploring the worlds of Doom, Mass Effect or Ratchet & Clank, the last thing on your mind is who owns the company that made it or how much they paid for it. However, the boardroom shenanigans can have a big impact on the franchises involved and fans are the first to notice when a buy-out leads to a sudden drop in quality.
Businessfinancing.co.uk has looked into the biggest gaming acquisitions of the 21st Century, as well as the games involved. After a year where we’ve all spent so much more time than usual gaming - instead of doing pretty much everything else - during lockdown, it’s a fascinating deep dive into what goes on behind the scenes.
The worlds of video game companies have been in the news for all the wrong reasons recently with shocking revelations coming out of Activision Blizzard, makers of games like Call of Duty, Guitar Hero, World of Warcraft, Diablo and Candy Crush Saga. They have led to big name talent leaving the business, which can only impact the franchises they worked on, making it hard for gamers to ignore the issues, regardless of their loyalty to the brand.
So here’s everything you need to know about gaming acquisitions:
Sometimes it’s not even hot new franchises that get bought up, like when Bandai purchased Namco and gained the likes of Ridge Racer, Pac Man and Tekken, or when Square Enix bought Taito and gained the rights to Space Invaders and Bubble Bobble. Many of those games started out on arcade machines, but many of the most recent big acquisitions have been for franchises built on much smaller devices.
Mobile games have become a hugely lucrative market and big brands like Zynga have boosted their income through acquisitions that have earned games like Draw Something, Clash of Clans, Hay Day, Boom Beach and Empires & Puzzles.
A much more significant acquisition took place in 2001 and for the comparatively small price of just $30m. That’s how much it took for Activision (now Activision Blizzard) to buy developer Treyarch and 19 years later the parent company made $678 million in just six weeks when the latest incarnation of Treyarch’s Call of Duty series was released. That franchise alone has earned Activision Blizzard billions, with Treyarch’s team also working on Spider-Man and James Bond games.
More recent acquisitions have been much bigger in scale, like Nuverse’s $4 billion purchase of Moonton in 2020. Nuverse is the gaming arm of ByteDance, the people behind TikTok and that move brought game franchises like Mobile Legends into their portfolio. It was a definite statement of intent in an industry that had seen smaller acquisitions over the last few years after a big spike in the mid 2010s.
That outlay has only actually brought in three companies, with Leyou and Riot Games joining Supercell in their stable. Leyou began life as a poultry company, so what Tencent saw in them possibly remains to be seen, but their spending overall on mobile games company means that they now control lucrative franchises like League of Legends, Clash of Clans, Hay Day, Clash Royale and Gears of War.
Microsoft has been at the top of the software game for decades now and entered the gaming world with great success when it launched its Xbox consoles. Its rivalry with Sony’s Playstation means that getting exclusivity on big game franchises can be the difference when a gamer is weighing up their options, and that has led it to buy ZeniMax Media, Mojang Studios and Rare Inc for a collective $11 billion.
With the Doom, Elder Scrolls and Minecraft brands under their ownership, that’s a lot of potential revenue for Microsoft even if they continue to allow those games to appear on rival consoles. The third biggest spenders are Electronic Arts, which has spent $7 billion buying up several other companies and bringing games like Mass Effect and Plants and Zombies in alongside its original properties like the FIFA and Madden NFL franchises.
Activision Blizzard made the third biggest purchase of all time in 2015 when it bought King, the developers of the hugely successful and lucrative Candy Crush Saga games, which shows that what companies are looking for isn’t always the big high tech games on the latest consoles but can also be the games that people play on the bus... or the toilet.
That’s where the gaming market is at the moment, with the big purchases showing that developers who are making a success out of games on any popular platforms are always going to be a temptation for those with lots of money and a desire to buy into a winning formula to stay on top.
Time will tell whether the acquisitions being made by the likes of Tencent and Shanghai Giant Network Technology will swing the balance away from the USA to Asia in terms of who owns the games we play - and what different that makes to the games themselves.
Read next: These billionaires had their career breakthrough after the age of 35 (infographic)
Businessfinancing.co.uk has looked into the biggest gaming acquisitions of the 21st Century, as well as the games involved. After a year where we’ve all spent so much more time than usual gaming - instead of doing pretty much everything else - during lockdown, it’s a fascinating deep dive into what goes on behind the scenes.
The worlds of video game companies have been in the news for all the wrong reasons recently with shocking revelations coming out of Activision Blizzard, makers of games like Call of Duty, Guitar Hero, World of Warcraft, Diablo and Candy Crush Saga. They have led to big name talent leaving the business, which can only impact the franchises they worked on, making it hard for gamers to ignore the issues, regardless of their loyalty to the brand.
So here’s everything you need to know about gaming acquisitions:
The franchises involved who’ve been bought and sold
When a big video gaming company buys up a smaller one, it’s normally because there’s something they own that the bigger company wants. They may have grown to their size through the games they’ve developed, but can’t rest on their laurels, so need to keep an eye out for fresh talent, new opportunities and the hottest games on the market.Sometimes it’s not even hot new franchises that get bought up, like when Bandai purchased Namco and gained the likes of Ridge Racer, Pac Man and Tekken, or when Square Enix bought Taito and gained the rights to Space Invaders and Bubble Bobble. Many of those games started out on arcade machines, but many of the most recent big acquisitions have been for franchises built on much smaller devices.
Mobile games have become a hugely lucrative market and big brands like Zynga have boosted their income through acquisitions that have earned games like Draw Something, Clash of Clans, Hay Day, Boom Beach and Empires & Puzzles.
Gaming acquisitions 2000-2021
The 21st Century has seen huge acquisitions in the gaming market, but everything kicked off with some relatively small purchases. In 2000, the takeover was Uproar Inc buying online games developer iWin for $154m, while Uproar was itself bought out by Flipside Inc just a year later.A much more significant acquisition took place in 2001 and for the comparatively small price of just $30m. That’s how much it took for Activision (now Activision Blizzard) to buy developer Treyarch and 19 years later the parent company made $678 million in just six weeks when the latest incarnation of Treyarch’s Call of Duty series was released. That franchise alone has earned Activision Blizzard billions, with Treyarch’s team also working on Spider-Man and James Bond games.
More recent acquisitions have been much bigger in scale, like Nuverse’s $4 billion purchase of Moonton in 2020. Nuverse is the gaming arm of ByteDance, the people behind TikTok and that move brought game franchises like Mobile Legends into their portfolio. It was a definite statement of intent in an industry that had seen smaller acquisitions over the last few years after a big spike in the mid 2010s.
The world’s biggest gaming acquisitions
That spike was driven by three of the top five acquisitions, including the biggest of them all. That was Tencent’s around $9 billion purchase of Supercell in 2016 (adjusted for inflation). Tencent is a Chinese multimedia conglomerate that clearly has big ambitions judging by its $11.5 billion spend, which makes it the biggest spender in the marketplace.That outlay has only actually brought in three companies, with Leyou and Riot Games joining Supercell in their stable. Leyou began life as a poultry company, so what Tencent saw in them possibly remains to be seen, but their spending overall on mobile games company means that they now control lucrative franchises like League of Legends, Clash of Clans, Hay Day, Clash Royale and Gears of War.
Microsoft has been at the top of the software game for decades now and entered the gaming world with great success when it launched its Xbox consoles. Its rivalry with Sony’s Playstation means that getting exclusivity on big game franchises can be the difference when a gamer is weighing up their options, and that has led it to buy ZeniMax Media, Mojang Studios and Rare Inc for a collective $11 billion.
With the Doom, Elder Scrolls and Minecraft brands under their ownership, that’s a lot of potential revenue for Microsoft even if they continue to allow those games to appear on rival consoles. The third biggest spenders are Electronic Arts, which has spent $7 billion buying up several other companies and bringing games like Mass Effect and Plants and Zombies in alongside its original properties like the FIFA and Madden NFL franchises.
Activision Blizzard made the third biggest purchase of all time in 2015 when it bought King, the developers of the hugely successful and lucrative Candy Crush Saga games, which shows that what companies are looking for isn’t always the big high tech games on the latest consoles but can also be the games that people play on the bus... or the toilet.
That’s where the gaming market is at the moment, with the big purchases showing that developers who are making a success out of games on any popular platforms are always going to be a temptation for those with lots of money and a desire to buy into a winning formula to stay on top.
Time will tell whether the acquisitions being made by the likes of Tencent and Shanghai Giant Network Technology will swing the balance away from the USA to Asia in terms of who owns the games we play - and what different that makes to the games themselves.
Read next: These billionaires had their career breakthrough after the age of 35 (infographic)