Welcome to a new segment I’ve dubbed Monday Musings. Each week, I chat about what’s current in gaming, and where I’m at in my backlog journey.
Today, as has become routine, I woke up, checked my phone, and skimmed this morning’s press releases.
Nothing super serious of note—NFT scams, crypto interview opportunities… the sort of buzzy headers you tend to roll your eyes at before scrolling on.
And so, I did. Until I hit something of interest.
Focus Home Interactive announces the acquisition of game developer Leikir Studio.
Another day, another industry acquisition. The full press release followed:
Focus Home Interactive today announces the acquisition of video game developer Leikir Studio. Based in Paris and made up of around twenty passionate creators, Leikir Studio thus becomes the 5th development studio to integrate with Focus alongside Deck13, Dotemu, Douze-Dixièmes, and Streum On.
With the acquisition of Leikir Studio, Focus has several new production lines with various art directions – stylized 3D, pixel-art and 2D. After having developed several PC and console titles acclaimed by the press and players, LEIKIR STUDIO is currently working on the game Metal Slug Tactics. Due to release in 2022, the game is a highly promising and anticipated title, based on the legendary license from Japanese publisher SNK. As a partner of Leikir Studio and subsidiary of the Focus Group, Dotemu will be responsible for publishing the game. In addition to its ability to produce quality titles with unique gameplay, Leikir Studio also has significant technical know-how, something its founding President Aurélien Loos has aimed to nurture from the beginning.
“We are happy to join the Focus Group because it is an important step for the growth of our studio. This acquisition validates our multi-production strategy and will allow us to reach new qualitative and creative heights. This is a great recognition for the work accomplished by our teams over the past several years” declares Aurélien Loos, President and founder of Leikir Studio.
“Following Deck13, StreumOn, Dotemu and Douze-Dixièmes, it is with great pleasure that we welcome a fifth studio to the Focus Group,” says Christophe Nobileau, President of Focus Home Interactive. “We are constantly looking for new talents capable of growing and supporting the ambitions of our Group, and Leikir Studio, headed by Aurélien Loos, is a choice acquisition to achieve this objective.”
The latest move in 2022’s Great Gaming Consolidation, this headline’s just the latest in a recent timeline of events:
- Jan 10, 2022: Take-Two buys Zynga.
- Jan 18, 2022: Microsoft buys Activision-Blizzard.
- Jan 31, 2022: Sony buys Bungie.
January may be past us, but the spending spree goes on. And while Focus Home Interactive may not be in the same league as a Take-Two or Microsoft, make no mistake: They’re big. The company trades on Euronext (the largest stock exchange in Europe), and is currently priced at € 43.80 a share, with a market cap of € 281.9 million ($318.7 million).
Sure, it’s small-cap. And sure, this news won’t exactly light the internet ablaze, or keep anyone awake tonight. But… maybe it should?
I’ve spoken about video game industry consolidation in the past, but never would I have imagined the scale or speed at which we’re moving today. Today’s purchase is mere pennies in the pond compared to what big tech is spending to acquire big fish.
If this is the new status quo, what’s the end state? Who ends up getting bought next? I broke out a pad and pencil (translation: took out my laptop) and started scribbling notes:
The Biggest Sharks
- Apple. Market cap: $2.8 trillion. Will Apple double down on its Apple Arcade service? The metaverse? Who the heck knows.
- Microsoft. Market cap: $2.2 trillion. Surely they couldn’t make another move… right?
- Google. Market cap: $1.8 trillion. Google Stadia was a flop. Might Google consider going external to find the right gaming infrastructure?
- Amazon. Market cap: $1.6 trillion. Amazon bought Twitch. It released an MMO. Perhaps there’s more in the pipeline.
- Meta. Market cap: $593 billion. Facebook might have missed its Q1 earnings, but Zuckerberg continues to be the loudest megaphone for the metaverse.
- Tencent. Market cap: $587 billion. The world’s largest video game company, Tencent’s certainly no stranger to big acquisitions.
- Disney. Market cap: $272 billion. Could the owner of Star Wars and Marvel make a serious play in the video game space?
The Biggest Fish
- Sony. Market cap: $140 billion. Sure, Sony could qualify as a shark here. But the reality is, those giants I highlighted above have more spending power, and more reason to break the piggy bank.
- Nintendo. Market cap: $65 billion. Nintendo would never sell, but this just puts into perspective how small the house of Mario truly is.
- Electronic Arts. Market cap: $38 billion. Tencent aside, EA is now the biggest third-party publisher in the industry—and the biggest acquisition target short of Sony or Nintendo.
- Take-Two Interactive. Market cap: $19 billion. It’s crazy to think the steward of Grand Theft Auto and 2K is half the size of EA. Might that make T2 a more valuable investment? I certainly don’t want to think about it.
- Embracer Group. Market cap: $9.3 billion. Embracer Group was the subject of my last chat about video game consolidation. This Swedish holdings company seems to gobble up everything in sight—and yet it’s still simply swimming in a pond.
- Ubisoft. Market cap: $7.2 billion. The makers of Assassin’s Creed would be a relative bargain compared to its peers in the space.
- Focus Home Interactive. Market cap: $319 million. I couldn’t wrap this list without putting it all into perspective once again.
Where Does Gaming Go From Here?
This isn’t a question I aim to answer today. I don’t think anyone feasibly could. What I do think, however, is that there’s power in awareness.
Focus Home is relatively small, but perhaps our definitions of what’s “small” or “relative” have become relatively F-ed up?
Just food for thought (and the pond).
