Yesterday Mail.ru Group, a major Russian Internet company, announced the acquisition of Moscow-based mobile game developer and publisher Pixonic. The LSE-listed group has acquired 100% of the company for $30 million in cash, including $20 million upfront and $10 million deferred and based on performance indicators.
Gaming is one of the key activities of the group, whose portfolio includes a number of MMOs, social and mobile games. Among the most succesful ones are Skyforge, Legend: Legacy of the Dragons, Allods Online, Lovely Farm, Evolution: Battle for Utopia, Jungle Heat, Warface, ArcheAge, Perfect World and others.
“We are very pleased to be adding one of the world’s most talented teams of mobile games developers. There is a clear strategic fit here and we look forward to working together to strengthen our international mobile games development and publishing and take the company’s games to even further success,” said Mail.Ru Group Chairman and CEO Dmitry Grishin, commenting on the acquisition.
Specifically, the acquisition will enable Mail.ru Group to access a major new audience that is spending money on free-to-play apps in the $36.6 billion mobile-gaming industry, notes VentureBeat.
This is especially the case in the US, where Pixonic’s War Robots generates the bulk of its revenues. With more than 500,000 daily users and 20 million installs passed in September 2016, this game is also popular in Japan, China, Korea and Germany. Russia comes 6th with 1.5 million installs to date.
Not a “global leader” yet
When founded in 2009, Pixonic and its “Jedi team” aimed to become ”a leading global publisher.” The startup initially focused on developing and publishing social network games. In 2013, it began developing more long-term mobile projects. Pixonic’s first success in this segment was Robinson, followed by War Robots.
Pixonic was initially backed by Russian venture fund AddVenture. In subsequent rounds the company obtained an additional $1 million from QIWI founder Andrey Romanenko and $5 million from Russia’s Kite Ventures, Ukraine’s TA Ventures and France’s Ventech.
The company has not become a “global leader” yet, but it employs more than 100 professionals and specialists in its offices in Belgorod and Moscow (Russia) and Berlin.
In 2015, Pixonic’s revenues reached 456 million rubles (approximately $7.3 million at the average exchange rate). They jumped to 619 million rubles ($8.8 million) in H1 2016, placing Pixonic 8th among Russian game publishers. In both periods Pixonic was “broadly EBITDA neutral,” according to Mail.ru Group.
The Russian online and mobile games market reached nearly $1 billion in 2015.
