The End Game How Top Developers Sold Their Studios
The End Game How Top Developers Sold Their Studios In November 2002 Angel Studios was purchased by Take Two for $28 million dollars in cash and 235,000 shares of stock. A month earlier Activision purchased Luxoflux for $9 million dollars and 110,000 shares of stock. That same year Infogrames (now Atari) purchased Shiny for a surprising $47 million dollars, and who can forget Microsoft’s purchase of Rare for a whopping $375 million? And the list goes on: Massive Entertainement, Rainbow Studios, Barking Dog, Black Box, Shaba Games, Gray Matter, Treyarch, Outrage, Volition, Digital Anvil, Westwood Studios, and more. All have been purchased by a major publisher and experienced the thrill of the end game. For many developers, selling their studio is the final prize for a race well run. But what do you really know about how a deal goes down and whether or not you are a good prospect? What is it that will make your studio attractive? How will your company be valued? And perhaps most importantly, what can you do to prepare? The information presented in this lecture is based on interviews with key executives from both sides of an acquisition transaction: independent game studios who have been purchased and the publishers who purchased them. Interviews were also conducted with attorneys and investment firms that deal in mergers and acquisitions within the video game and software industries. And finally, research was conducted to quantify specific transactions and acquisition details. DISCLAIMER Mergers and acquisitions are complex business relationships that require the help of legal and accounting professionals.
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