The cash-and-stock deal narrowly surpasses the total amount of funding that Scopely has raised to date ($998.5 million). Through the acquisition, Sony Pictures will become a minority shareholder in Scopely, and the startup will take control of mobile titles like "Wheel of Fortune Slots" and "Solitaire TriPeaks."
Culver City-based Scopely was valued at $3.4 billion about a year ago, according to Pitchbook.
"We hope to take what is already a strong business and accelerate it through our publishing and technology infrastructure, unlocking even more value," said Scopely chief revenue officer Tim O'Brien in a statement to press. "Through this acquisition, we will continue to cultivate a loyal player base as part of our mission to inspire play, every day."
Launched in 1999 as the online games site WorldWinner.com, a series of acquisitions eventually led to the creation of GSN Games, a subsidiary of Santa Monica-based Games Show Network — which itself became wholly owned by Sony Pictures after a series of yet more acquisitions.
The billion-dollar-deal follows Sony Pictures' sale of the WorldWinner brand to Game Taco, a San Francisco-based publisher, earlier this year.
- Mobile Gaming Unicorn Scopely Adds $200 Million in Series D ... ›
- Jam City Will Go Public Via a SPAC - dot.LA ›
- Artie Mobile Gaming and NFT Startup Raises $35.9 Million - dot.LA ›
Jam City finalized its plans to pick up mobile gaming company Ludia – known for its "Jurassic Park" themed games – for $165 million, as the Culver City-based company seeks to become the "go-to studio for Hollywood."
The acquisition was first announced in May as part of Jam City's plans to go public via a $1.2 billion SPAC. But the IPO fell through. Since then, Jam City has raised a $350 million round from existing investors including Netmarble, Kabam and Fortress Investment Group and it's on the hunt for more companies to pick up.
"Gaming is evolving from being what a lot of studios considered an ancillary revenue stream and from the very beginning in the creation of the franchise, [studios] are thinking about how gaming fits into the strategy of that IP," Jam City Chief Operating Officer Josh Yguado said.
In the Canadian gaming company, Jam City sees a game developer with deep ties to Hollywood. The company has long had a partnership with NBCUniversal and their properties. Ludia's developed three games based on their "Jurassic Park" franchise, including "Jurassic World Alive," along with games based on the "How to Train Your Dragon" and "Teenage Mutant Ninja Turtles" franchises. Ludia is also working on two untitled games based on DC Comics and Disney properties.
Jam City's two biggest games right now are based on well-known franchises: "Harry Potter: Hogwarts Mystery" and "Disney Emoji Blitz."
The company's goal, Yguado said, is to become "the go-to studio for Hollywood" and noted that over half of Jam City's portfolio is games based on existing franchises.
Mobile Gaming Is 'Absolutely Dominant'
In the first half of 2021 gaming deals reached a record $60 billion high, according to research from Drake Star Partners.
Gaming analysts at Newzoo estimated last year that there's roughly 2.6 billion mobile gamers worldwide, but only 38% pay for their games. Getting players to spend on in-game content is key for Jam City's revenue, since most of its games are free to play. The average person buying Jam City's in-game content spends $45-$100 per month, the company said.
Jam City wouldn't disclose its revenue but Yguado said earnings have grown by "double digits" in the last five years and added lifetime in-game spending exceeds $3 billion.
"We really think of mobile gaming, and gaming broadly as the fastest growing entertainment sector; there's faster revenue growth than film and TV and music and within gaming, mobile is absolutely dominant," Yguado said.
Expanding in the Americas
The deal adds 400 employees to Jam City's 800-strong team and adds a second Canadian office to its growing international footprint.
Yguado said it is looking abroad for more companies that it can operate for less. Jam City is targeting Canada or Latin America, where governments contribute to production costs or offer tax breaks.
"Broadly, there's a trend of companies employing talent in lower-cost regions," Yguado said, noting that Jam City has also expanded into studios in Argentina and Columbia. "It makes a real difference in terms of diminishing cost per head."
Jam City's main local competitor is Scopely. Also based in Culver City, Scopely is buying up mobile gaming firms outside the U.S. at a rapid rate too, most recently targeting game makers in Spain and Ireland.
Scopeley's biggest game is "Marvel Strike Force," a game developed with Disney that brought in $8 million from in-game purchases last month, Sensor Tower reported. Comparatively, Jam City's "Harry Potter" game generated $2 million in the same time frame. Sensor Tower does note overall Jam City recently counted more downloads than Scopely – roughly 2 million last month, compared to Scopely's 800,000.
- Jam City Wants to Make Mobile Gaming an eSports Phenomenon ... ›
- Jam City Will Go Public Via a SPAC - dot.LA ›
The founders of Afterparty see themselves as on the forefront of a so-called "Web 3," a reimagined internet that relies less on private intermediaries like Google and Facebook, and enables more direct connections between creators and their fans through the blockchain.
The L.A.-based startup launches Thursday to provide tools for creators to both mint NFTs and host online events that require crypto tokens for entry. It's also bringing on Eytan Elbaz, founder of mobile gaming giant Scopely, as an investor and giving him the title of co-founder.
Barely five months old, Afterparty was founded by Dan Rahmel, previously of Music Audience Exchange, and David Fields, a former strategist at Disney and head of investments at former Disney CEO Michael Eisner's The Tornante Company. It aims to empower creators by making it easier for them to create NFTs.
Fields said the status quo of the creator economy forces creators to cater to social media platforms' algorithms, and drowns out the true fans in comment sections. But through NFTs and the closely related "social tokens," which enable individuals and groups to issue cryptocurrencies linked to themselves, Web 3 may be changing the balance.
Afterparty co-founders (from left) Eytan Elbaz, Dan Rahmel and David Fields
At Disney, Fields helped lead the Pixar acquisition in 2006, and with Eisner he invested heavily into the creator economy when it was being fueled by a nascent YouTube.
"I think we're entering a second, just as powerful disruptive wave with crypto networks," Fields told dot.LA. "We are at as profound a moment for the creator economy and entertainment industry as we saw with broadband internet coming in."
Afterparty provides design templates to help creators mint NFTs. Designers can submit frameworks and earn compensation from the platform if their submissions are used.
The company itself issues a crypto token as well, which can be required to access events on the platform. The token also provides owners with voting power to make decisions on things like what the company should do with the money. In this way, Afterparty aims to become a so-called decentralized autonomous organization, with majority ownership held by its community via these "governance tokens."
A screenshot of Afterparty's website.
During the company's beta period, held in June and July, artists Clay Perry and Tropix earned $500 and $1,000 in direct income, respectively. Jon Youshaei, who hosts a popular Clubhouse show about the creator economy, also participated in an event.
"We felt like we were selling picks and shovels in a gold rush," Fields said. The company has focused so far on musicians but plans to expand into broader creator categories.
Elbaz, one of the L.A. tech community's biggest success stories, is himself a musician, like his co-founders.
"NFTs are at a critical inflection point where the merging of music and art with digital assets will take the industry in whole new directions," he said in a press release. "We're now at a place where we must facilitate how creators and fans can exchange them seamlessly."
The NFT markets have been up and down lately, with some platforms seeing record highs while others have plummeted. Though it may seem like the hype cycle has hushed following the NFT mania that crested with digital artist Beeple's $69 million sale in March, administered by auction house Christie's, the Aftrparty team and the crypto community at large see the party just beginning.
"I think we're going to see an explosion of really exciting new experiments," Fields said.