Sweden-headquartered digital entertainment group MTG announced an acquisition of US games publisher and developer Kongregate from current owner GameStop for an enterprise value of $55 million.
In a statement, MTG explained Kongregate works with independent developers, publishing games across mobile and web platforms, attracting up to 14 million monthly active users.
Kongregate published 45 mobile games which have been downloaded over 100 million times. It also offers a web gaming portal with over 100,000 free-to-play games accessed by millions of gamers each month.
On the publishing side, Kongregate’s services include consulting, analytics, marketing and user acquisition, as well as launch support and advertising management.
The company is expected to generate net sales of at least $50 million in 2017. In 2016, it grew its net sales 38 per cent to $35 million, with mobile revenue, generated from in-game purchasing and advertising growing 74 per cent.
Kongregate started as a web gaming platform and since expanded into publishing for both mobile and Steam, an online gaming platform, along with first-party game development following an acquisition of games studio Ultrabit.
MTG and Kongregate intend to acquire further first-party games developers, which the Sweden-based company said will benefit from Kongregate’s global audience network and traffic generation capabilities.
The investment follows MTG’s recent acquisition of 51 per cent of online games developer InnoGames, and gives MTG a clear foothold in both the European and US markets, it stated.
Kongregate’s popular apps include Animation Throwdown: The Quest for Cards, which was installed 8.6 million times, and AdVenture Capitalist, with 20.8 million installs.
Jorgen Madsen Lindemann, MTG’s CEO, said the investment: “is in line with our strategy to invest in relevant, complementary and scalable digital content and communities.”
He said the overall gaming industry is expected to be worth around $130 billion in 2020, of which mobile gaming is the fastest growing segment. Indeed, almost a third of the time people spend on mobile devices each day is spent gaming, Lindemann noted.
The transaction is subject to regulatory approval and completion of certain other closing conditions.