The Mobile gaming world has been buzzing lately by the news that Supercell of Finland was acquired by Softbank and GungHo of Japan for $1.5 billion. This would value the Supercell at roughly $3 billion, not bad for a game company with only two games.
As I wrote in a previous column, Supercell is an exceptional studio so news of the investment was not as surprising as the fact that it took this long for anyone to acquire the studio.
What is interesting is that the acquirers are Japan’s SoftBank and game studio GungHo rather than the usual US social media or game conglomerates that made news in the past. Of course this trend is in line with previous recent news that Asian companies are on a mobile game buying spree: Chinese, Korean and Japanese companies have made an effort this year to go beyond national boundaries and expand their markets into the growing mobile markets around the world. This latest news confirms the trend is still going strong.
One could have seen some indications of this future relationship on Supercell’s own games which for the last few months had close cross promotion with Gung Ho’s Puzzle and Dragons within their game. The courting of this deal probably began months ago when ads (the only one) for Puzzles and Dragons were appearing in the bulletin section of the game Clash of Clans. The acquisition based on some details given is more than just a monetary decision but one of compatible cultural values on management and content quality.
This recent investment has upped the stakes for valuations of game studios, dwarfing past acquisitions like NGMOCO, Playdom, and Playfish. Even the PopCap acquisition at $1 billion seems small in comparison. Facebook’s acquisition of super high growth Instagram for $1 billion is smaller as well.
As mentioned in my previous column, a China (or other Asian countries) probably won’t be ready to create a studio like Supercell for another couple of years. The market seems to agree, and its answer to this situation is for Asian companies to buy game studios outside of Asia to accelerate the process.
Expect more acquisitions by Asian companies in the future to continue and maybe some, but fewer, in the other direction.