MTG makes play for games firm Kongregate

Modern Times Group (MTG) is to acquire a US games publisher and developer for US$55m as part of its shift away from traditional broadcast operations.

Jørgen Madsen Lindemann

The Scandinavian media operator will take 100% ownership of San Francisco-based Kongregate in a deal with the latter’s current owner, GameStop Corp.

Kongregate claims to attract up to 14 million monthly active users across all platforms, with more than 100,000 games on its own browser platform and more than 100 million downloads of 45 games from app stores.

The firm was founded in 2006, has 80 employees and is expected to generate net sales of at least US$50m in 2017, according to MTG.

MTG and Kongregate added that they intend to acquire further first-party games developers following the deal.

MTG increased its stake in Hamburg-based online games developer InnoGames to 51% earlier this year, meaning MTG now has a foothold in both the European and US games markets.

The Scandi media outfit has diversified its business in recent years with major stakes in eSports operators ESL and DreamHack, MCNs Zoomin, Splay and others.

Kongregate mobile games include Animation Throwdown: The Quest for Cards, AdVenture Capitalist, Peter Molyneux’s The Trail and BattleHand.

“This investment is in line with our strategy to invest in relevant, complementary and scalable digital content and communities,” said Jørgen Madsen Lindemann, MTG’s president and CEO.

“Online gaming is one of our three digital entertainment verticals and we are establishing a presence in a gaming industry expected to be worth some US$130bn in 2020, of which mobile gaming is the fastest growing segment. Almost a third of the time people spend on mobile devices each day is spent gaming.”

Arnd Benninghoff, MTG’s executive VP and CEO of MTGx, added: “MTG’s ambition is to create a next-generation publisher hub and acquiring Kongregate is the next step in this journey.”

The transaction is subject to regulatory approval and completion of certain closing conditions. MTG’s financial advisor on the transaction is EY Corporate Finance.