MY.GAMES has announced the consolidation of a controlling stake in Deus Craft, a mobile games development studio. Through the deal MY.GAMES now holds a controlling 51.16% stake in Deus Craft. The deal includes an upfront payment of $14.1 million and a deferred payment up to $35 million payable in April 2021, with the maximum payout achievable only if the studio reaches monthly revenue of ~$15 million as of Q1 2021. The transaction is expected to be completed in October 2020 with consolidation into Mail.ru Group’s management accounts as of Q3 2020 reporting.
Deus Craft has offices in Moscow, Saint Petersburg and Novosibirsk, and employs more than 70 people. The company’s current flagship product, the Grand Hotel Mania mobile game, was released in July 2020 and the following month already ranked second among mobile games in terms of revenue in the time management category on iOS and Android. The game was particularly successful in the United States – in September, this market accounted for more than 50% of the product’s total revenue.
Founders of Deus Craft studio – Alexey Belkin (HD), Andrey Yanchenko (General Producer), Dmitry Shubeikin (CEO), Vladimir Krylov (Lead UA) and Sergey Shatokhin (Original Founder, CMO) – bring 15+ years of casual mobile games development expertise to MY.GAMES. The Deus Craft management team is expected to remain unchanged after the studio joins the MY.GAMES ecosystem.
Currently, Deus Craft is in an active stage with two more mobile games in development, which are expected to be released within the next 12 months. Therefore, the consolidation of Deus Craft is not expected to have a significant negative impact on MY.GAMES EBITDA in 2020. As a result, in the 3rd quarter of 2019, the studio received revenue of 0 million rubles and an EBITDA loss of -3.7 million rubles.
Vasiliy Maguryan, CEO of MY.GAMES:
“We are happy to welcome Deus Craft to the MY.GAMES family, which already includes more than a dozen studios with unique profiles and many years of development experience. By becoming part of the MY.GAMES ecosystem, studios can scale their business multifold and use all the advantages of an open partner environment for sharing experience. We are confident that the Deus Craft team will help us further strengthen our expertise in the mobile segment, especially in the new time management genre”.
Dmitriy Shubeikin, CEO of Deus Craft:
“MY.GAMES is the most attractive partner we have identified considering its marketing and analytical expertise, detailed understanding of the industry globally and impressive super growth track record as well as appetite to provide Deus Craft with maximum creative freedom. MY.GAMES offers experience in scaling products and providing comprehensive support to portfolio studios, and we are confident that joining MY.GAMES will allow us to maximize our potential”.
MY.GAMES generates more than a third of all Mail.ru Group revenue. In 2019, MY. GAMES ranked 42nd among the largest gaming companies in the world with revenues of $483m. Over the past four years, MY.GAMES revenue growth rates were triple the gaming market average. The main strategic focus of the MY.GAMES gaming business is growth on international markets and in the mobile segment. Examples of successful studio consolidation in recent years are Pixonic, BIT.GAMES, SWAG MASHA, BeIngame, and others. After joining MY.GAMES, Pixonic studio showed growth increase almost six-fold. Since Q3 2019, SWAG MASHA studio increased its revenue 1.7-fold as its game Love Sick: Interactive Stories became a top-5 mobile title for MY.GAMES as of Q2 2020.
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