The $120-million US deal to acquire Victoria-based game developer Kixeye will change the studio’s culture, improve its performance and put it on the fast track to growth, says Clayton Stark, president of Kixeye.
Ten days after the sale to Sweden-based game studio Stillfront, Kixeye is beating the bushes looking for talent to add to the company’s roster of 180, Stark said.
“It means growth and prosperity, quite frankly,” said Stark, whose retention was a key part of the transaction.
Stark said what sold him on the deal was the chance to see what his team could do under ideal conditions.
“This is an opportunity to change the mode of operations for the entire company,” he said, noting they will be transitioning from a culture that was reactive and constantly being forced to chase targets.
“Now there is stability. We won’t always be chasing or waiting for the other shoe to drop,” he said. “I know the same team of people with the same products can have a better outcome in so many dimensions. They can do better work.”
They will also be able to draw upon the strength of other studios under the Stillfront banner.
Stillfront is a global conglomerate of gaming studios focused on free-to-play online strategy games. Over the last nine years, it has been adding studios to its portfolio, and closed 11 acquisitions in that time.
“The deal gives Stillfront an opportunity to get into new markets, and at the same time all the other studios can help us,” said Stark. “They are all better at a certain thing than we are and we are better at a couple of things than they are. The whole group was founded on getting companies together under one roof so everyone gets better.”
The deal makes Victoria the centre of the Kixeye world with additional development centres in Vietnam and Australia. Stark said there will be gradual growth in each region, but he expects significant growth in the short term at the head office in Victoria.
He wants to hire 10 people immediately across a variety of disciplines, including operations and finance as well as game development. By this time next year, he expects the Victoria team will be up to 80 staff. There are currently 59.
Stark expects there is plenty of talent to tap into locally, noting he’s never had trouble attracting the best and brightest in the past.
“Stillfront bought us because they liked our fundamentals and because they know we can grow,” he said. “And we have a lot of long-term stability because we are now backed by a Nasdaq-listed public company.
“We are stable, we are growing and I expect us to be a far more prosperous group as well.”
Kixeye’s games have done well financially. When the deal was announced, Stillfront noted the studio generated a profit of $13.5 million US in the first quarter of this year.
Stark said given the global gaming industry is estimated to bring in revenue in excess of $138 billion US annually, there is still plenty of room to grow.
The purchase price for Kixeye includes $90 million US in cash, and as much as another $30 million US if Kixeye reaches certain financial targets in 2019.
Kixeye’s products include Battle Pirates, War Commander, Vega Conflict and War Commander: Rogue Assault. Battle Pirates is the top-grossing game on Facebook.