MTG, the Nordic media group that owns leading streaming service Viaplay, is in the process of acquiring 100% of Kongregate, a U.S. cross-platform games publisher and developer, for a value of $55 million.
Currently owned by GameStop Corp., Kongregate is a San-Francisco-based company with a global audience network. Its games attract up to 14 million active users across all platforms every month. Some of Kongregate’s most popular games include Peter Molyneux’s “The Trail,” which made it into Apple’s Best of 2016 awards and Google Play’s Best Games of 2016, and “Animation Throwdown: The Quest for Cards,” which was featured in Google Play Editors’ Choice and Google Play’s Best Games of 2016.
The acquisition of Kongregate, which is subject to regulatory approval and completion of other closing conditions, follows MTG’s recent pickup of Hamburg-based online games developer InnoGames, and gives MTG a foothold in both the European and U.S. markets.
“This investment is in line with our strategy to invest in relevant, complementary and scalable digital content and communities,” said Jørgen Madsen Lindemann, MTG President and CEO. “Online gaming is one of our three digital entertainment verticals, and we are establishing a presence in a gaming industry expected to be worth some $130 billion in 2020, of which mobile gaming is the fastest-growing segment.”
Madsen Lindemann added that “almost a third of the time people spend on mobile devices each day is spent gaming.”
Founded in 2006 as a web gaming platform, Kongregate today employs 80 people and has become a publisher for both mobile and Steam games, as well as a first-party game developer thanks to the acquisition of Ultrabit, the San Diego-based games studio behind “Office Space: Idle Profits.”
Kongregate is expected to generate net sales of at least $50 million in 2017 with an estimated profit margin of 10%.
MTG intends to acquire further first-party games developers which will benefit from Kongregate’s global audience network, traffic generation capabilities, and relationships with publishers and platforms.
Emily Greer, co-founder and CEO of Kongregate, said the partnership with MTG would allow the company “to step up expansion into new gaming platforms and channels.”
MTG’s yearly financial results will be published on July 18.