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The Changing Investment and M&A Scene in Mobile Gaming: Opportunities for Devs | Sebastian Storfner
1. The Changing Investment and M&A Scene in
Mobile Gaming: Opportunities for Developers
Sebastian Storfner
Director, Corporate Development
GREE International Entertainment Inc.
2. Sarah E. Needleman, The Wall Street Journal, August 18th 2016
The Market has changed
4. Growth but flat Downloads
Market continues to grow while downloads have stalled
Source: AppAnnie, Gossamer
Data reflects NA, EU, RUS, TUK
InMillionUSD
~30% yoy
5. 184
150
107
2014 2015 2016
Games launched this year in Top 1000
Shift in underlying Drivers
Production Cost ↑
UA spend ↑
LTV requirement ↑
Live Ops requirements ↑
Barriers to entry and maturity
New Titles VS Revenue Potential
71
106
147
2014 2015 2016
Games >$5M/ year
7. Theme: Mobile follows Consoles
Introduction Growth
Time
Demand
Maturity DeclineShake-out
Console
2003 Today
Midway
EA
Ubisoft
TakeTwo
Activision
Acclaim
Sierra Online
Atari
Epyx
THQ
Vast Marketplace
Ultimately, console games
will not require a console
Valve
Sony
Microsoft
Nintendo
EA
Ubisoft
TakeTwo
Activision
Disney
Few Large Players
Bethesda
Brash
Sega
DICE
Bandai Namco
+ many more...
Disney
Nintendo
Sony
Microsoft
SquareEnix
Valve
Mobile
Gaming
8. 1. Late Stage: Market Consolidation
$5.9bn
2.5x Rev
6.5x EBITDA
$8.6bn
3.7x Rev
9.2x EBITDA
M&A to own a segment
EUR 700M
2.7x Rev
33.3x EBITDA
Casual Strategy Generalist
$18.6 billion in the H1/2016 - 80% from three deals alone
9. 2. Midmarket: Build Portfolios
Strong interest in LiveOps titles (compare to consolidation in Casino)
Portfolio Management:
○ Strategic additions, no land grab
○ 2x Revenues, 6-7x EBITDA
7/20163/2016 2/2016 7/201610/2016 11/201610/2016
Move into or consolidate a segment
Mid Core Casual
10. 3. Build Studio System
Hedge bets and develop long-term opportunities
Selective publishing: Search for strong teams
Hard to price with multiples, alternative deal structures
11. Opportunity is there
● Concentrated bets
● Selected M&A and investments
● LiveOps: operate for years
● Support larger developer
The way opportunities are captured has changed
● Super specialization
● Track record, KPIs
● Competitive advantage
● Realistic expectations
Where are opportunities? What do teams need to have?