The German company Gamigo acquires the studio KingIsle, known for the MMORPGs Wizard 101 and Pirate 101 – for 126 million US dollars. Behind this is a strategy: The company aims to buy and further develop successful MMORPGs rather than create new ones.
What kind of purchase is this? Gamigo is a German publisher based in Hamburg. They have already attracted attention in recent years by acquiring larger development studios:
- In 2013 they acquired Aeria Games, the developer behind the MMORPG Last Chaos
- In 2018 there was the acquisition of Trion Worlds, known for Rift, Archeage, and Trove.
Now Gamigo is buying the development studio KingIsle Entertainment.
Gamigo adds child-friendly MMORPGs to its portfolio
What is KingIsle known for? KingIsle develops MMORPGs aimed at children and teenagers. The most well-known and successful game is Wizard 101, which resembles Harry Potter a bit and puts players in the role of wizards.
The players are wizard students who explore multiple worlds full of adventures and use their magical skills in tactical turn-based battles. Over time, players become more powerful by defeating enemies, collecting equipment, and learning more spells.
Pirate 101 was intended to go in a similar direction, but here the players are pirates searching for treasures. Pirate 101 was not quite as successful. The MMORPG hasn’t received any updates for quite some time.
How much money does Gamigo pay? The purchase price was stated as 126 million US dollars. However, that’s not all. An additional 84 million dollars are expected to flow if the revenue targets set for the company are met. In the fiscal year 2021, KingIsle is expected to achieve a revenue of 25 million euros, as well as a sustainable operational cash flow before tax of 17 million euros.
What impact does the acquisition have on the games? According to KingIsle, Gamigo aims to ensure that at least Wizard 101 can continue for another 10 years and be further developed. However, Pirate 101 is not mentioned. At this current time, at least the wizard MMORPG continues as planned.
On the studio’s blog, it is stated:
Gamigo and the team talked about the long-term perspective, about how we want to keep the game alive over the next ten years and beyond, and we are both committed to achieving that. We are determined to continue releasing updates and… there could be some exciting possibilities beyond what you expect. Stay tuned.
Investor buys MMORPGs as a strategy
What does this purchase bring Gamigo? Behind Gamigo is the investor Remco Westermann and his group “Media and Game Invest”, who landed in the video game industry rather by chance. He initially just wanted to buy, rehabilitate, and resell Gamigo. However, he then recognized the potential in the computer game market.
Now it’s about growth for him. Westermann believes that most game companies are too small to make an impact. Therefore, he is essentially collecting MMORPGs and relying on synergies to reduce technical costs. He currently has more than 30 online role-playing games in his portfolio. The strategy is not to develop large new titles, but to buy and further expand successful games.
In addition to the gaming arm, Westermann has also acquired media companies to have everything under one roof. In 2017, he purchased the multi-channel network Mediakraft.
In the summer of 2020, Gamigo CEO Remco Westermann stated (via OMR) that growth cannot be bought forever: “We have now acquired over 30 companies. Now we want to grow more organically.” However, it was further stated that three to five additional companies from a list of 65 possible candidates should still follow. This probably included KingIsle.
With the MMORPGs of the company, Gamigo has now added games to its portfolio that are aimed at a younger audience and are well received by this audience – at least when it comes to Wizard 101.
Do you want to experience a wizard game that is not only aimed at children? How about Wizards Unite – When Harry Potter meets Pokémon GO?
