Mail.ru Group’s appetite for acquisitions in the gaming space was confirmed again today as My.Games Venture Capital (MGVC), the investment arm of its subsidiary My.Games, announced minority investments in three game studios. These are Tworogue Games and VOX, based in Moscow, and Wideview Games from Minsk, Belarus.
MGVC put on the table $3 million in total for these deals, which include options to purchase control stakes at a later stage.
“We look at the market as a whole and invest in studios that work in genres with high reach and revenue potential. At the same time, we specifically focus on genres that we do not yet have in the MY.GAMES portfolio, which could significantly expand our expertise,” stated MGVC Executive Producer Nikita Matsokin said.
“One of our development goals is to diversify the gaming portfolio to the fullest with the possibility of further integrating the partner studios’ products into the group’s single ecosystem,” he added.
$90 million invested over four years
Last week a Mail.ru Group executive revealed the total amount MGVC has invested in the gaming space since its launch four years ago: 6 billion rubles, or around $90 million at the average exchange rate over the period.
A thousand Russian and foreign companies were screened, of which 45 received funding. Only seven portfolio companies have thus far achieved the targeted results, conceded Vladimir Nikolsky, co-founder of My.Games and operating director of Mail.ru Group, in a media interview.
The firm’s largest deal — 2 billion rubles — turned out successfully. This funding went to Novosibirsk developer Deus Craft, which further released Grand Hotel Mania. In August 2020, just weeks after launch, the game took second place in terms of revenue among mobile games in the time management category on iOS and Android. MGVC went further in October 2020, acquiring a majority stake in Deus Craft.
MGVC’s investment in Swag Masha was more modest ($150,000), but successful as well. The capital injection allowed this Belarusian studio to launch its flagship game, Love Sick: Interactive Stories, and quickly repay its new shareholder.
In late September My.Games announced it purchased a majority stake in Mamboo Games, nearly one year after a minority investment. Headquartered in Minsk, Belarus, and employing 35 people, this company develops own and third-party hyper casual and hybrid casual titles. My.Games paid “more than $2 million” at close of the latest deal. A deferred payment will depend on further business performance.
Vibrant industry
The past few months saw a series of other deals in the vibrant Russian gaming industry. Here are the most notable ones:
- In July Moscow-based GEM Capital, the investment vehicle of oil industry executive Anatoliy Paliy, backed Gameram with a $500,000 check. This video gamer social app was developed by Terraform Games, a Cyprus-based company co-founded by Russian gaming veteran Philipp Gladkov
- Green Grey, a Russian-founded publisher of mobile games and apps, invested $2.5 million in Infusion Games. Based in Estonia, this mobile games developer was founded in 2020 by two Russian IT veterans, Sergey Belyaev and Nikolay Shubin. The move came in August, just weeks after Green Gray announced the launch of NGU Games, a casual games studio and investment vehicle.
- Nexters, one of the most successful Russian-founded game development companies, went public through a merger with SPAC company Kismet. Under their merger agreement in February 2021, Nexters’ enterprise value was placed at $1.9 billion.
- In late September Embracer Group AB, a major Swedish developer and publisher of PC, console and mobile games for the global market, announced the acquisition of Russian Bytex. Founded in 2004 and based in Saransk (650 km east of Moscow), Bitex is a quality assurance (QA) studio focusing on games and B2B web portals. It employs around 240 people, including 190 engineers.
On its side The Games Fund — a vehicle launched in Moscow earlier this year to invest in Russia and neighbouring countries — reportedly attracted, in August, $17 million from American and South Korean mobile gaming majors Scopely and Com2us.
This story was republished by bne Intellinews, a syndication partner of East-West Digital News.
