Paul Wedgwood sold Brink developer Splash Damage to Radius Maximus, a subsidiary of Leyou Technologies Holdings Limited. What’s most interesting about this acquisition is that parent company Leyou is a Chinese poultry company. Leyou provided the following reason for the leap into video games:
According to the annual report for the year ended 31 December 2015 (the “2015 Annual Report”), the Group continues to face an arduous task in respect of the Poultry Business, where, despite efforts to improve raw materials procurement, feed production, breeder and broiler breeding, broiler slaughtering and process, quality and safety management and sales mix rationalisation and channel expansion, the management of the Group still has limited control of the business results and profitability under the harsh operational environment in the PRC. The 2015 Annual Report also stated that the global market for video games industry continued to experience healthy growth despite a slowing world economy.
Splash Damage is actually only Leyou’s second video game developer purchase. They started the process of buying Warframe developer Digital Extremes in July 2015 and sealed the deal in May 2016. After just five months of owning most of Digital Extremes, the company saw crazy profits over their chicken business.
The entrance into the Video Gaming Business enabled the Group (i) to diversify its business and mitigate the volatile and cyclical nature of the Poultry Business; and (ii) to enhance its profitability. For the year ended 31 December 2015, despite approximately 80% of the revenue of the Group was generated from the Poultry Business, approximately 70% of the gross profit of the Group was generated from the Video Gaming Business.
Wedgwood also sold Leyou’s subsidiary his back-end tech business, Fireteam, and his online multiplayer publisher Warchest.
The acquisition deal includes:
- funding Splash Damage, Warchest, and Fireteam up to $10 million for an “unannounced video game development project,” and
- total consideration payable to Wegwood will not exceed $150 million, which includes the deferred payments of the business, earn-out protections, and various other considerations, all of which are listed in the linked acquisition document above.
I’m personally hoping Leyou’s new slogan will be, “Come for the chicken; stay for the multiplayer.”
Splash Damage was also responsible for developing the multiplayer portion for Gears of War 4 as well as Enemy Territory: Quake Wars.
[Source: GamesIndustry]
