TheGamingEconomy’s Daily Digest brings you the prevalent business stories in gaming. In today’s news: Keywords raises £100m acquisition fund; Ubisoft sues Apple and Google; and Tencent to establish North American AAA studio.
Keywords raises £100m acquisition fund
Keywords Studios has raised approximately £100m through the issuance of 6.9 million new ordinary shares at a placing price of £14.50, with the financing to be used to support the acquisition of video game service companies struggling as a result of the Covid-19 pandemic. Any purchases by the Dublin-based firm will purportedly be in line with its current acquisition strategy of targeting multiple geographies, service sectors, and company scale. The raise follows Keywords amassing a similar £100m war-chest last year, which led to the acquisitions of Ichi, Kantan, Syllabes, Sunny Side Up, Get Social, Wizcorp, Descriptive Video Works, and TV+SYNCHRON Berlin GmbH.
The announcement proposing the raise reads, “Despite the background of the gaming industry’s general resilience to COVID-19 and structural growth drivers, the Group is expecting to see some stress in predominantly smaller service providers, which are typically single location and service with fewer clients and less able to weather the disruption. A third party survey of 300 professionals from Game Developers, Game Publishers and Service Providers conducted in late March 2020 revealed that 29% of Service Provides fear a risk of insolvency if the COVID-19 crisis were to continue for six months. This is likely to result in an increased number of acquisition opportunities for Keywords Studios, with some targets now more inclined to re-engage previously stale exploratory conversations.”
At the time of writing, Keywords Studios PLC (LON: KWS) share price is up 6.15% at £15.87.
Ubisoft sues Apple and Google
Developer-publisher Ubisoft has filed a lawsuit against Apple and Google in the US Federal Court in Los Angeles, alleging that the two companies have failed to remove an unauthorised copy of its Rainbow Six Siege (R6S) title from their respective Google Play and Apple App online stores. As initially reported by Bloomberg, the lawsuit alleges that Arena F2 (AF2), a mobile FPS title developed by Alibaba-owned Ejoy.com which was released last month, is a “near carbon copy” of R6S, copying various assets including its user interface. Ubisoft has reportedly notified Google and Apple of the alleged copyright infringement, with both refusing to remove AF2 from their storefronts at the time of writing.
The lawsuit reads, “R6S is among the most popular competitive multiplayer games in the world, and is among Ubisoft’s most valuable intellectual properties. Virtually every aspect of AF2 is copied from R6S, from the operator selection screen to the final scoring screen, and everything in between. Ubisoft’s competitors are constantly looking for ways to piggyback on R6S’s popularity and to capture the attention, and money, of R6S players.”
Update (08:52 BST – Thursday 21st May): Ejoy.com has announced that Arena F2 will be closed permanently as of 12pm GMT Wednesday 20th May, refunds will be offered on all player payments through Google Play and the Apple App Store.
Tencent to establish North American AAA studio
Tencent Holdings Limited will be establishing a new AAA-focused studio in the North American region, marking the latest in a series of moves to consolidate its market position in Western markets. The studio will be led by former Halo 4 Design Director Scott Warner, who will be leaving his position as Game Director at Ubisoft. While Tencent announced last week that its online game revenue had climbed by 31% during the first quarter of 2020 alone, the majority of its international growth has been powered by acquisitions and strategic investments, rather than through the establishment of its own development houses. While the exact location of the studio has yet to be confirmed, Warner has suggested on Twitter that Seattle and Los Angeles are leading contenders.
In further news from Tencent, Kojima Productions co-founder Ken-Ichiro Imaizumi, who left the Japanese studio in November last year, has reportedly joined the the former’s European division. Though his exact responsibilities are as-yet unclear, Tencent Europe primarily focuses on identifying new investment opportunities across the EMEA region, along with promoting the expansion of its WeChat social messaging, e-commerce, and gaming, platform.