WHY MTG INVESTED IN INNOGAMES, AND WHAT COMES NEXT
We just invested in a games company. We’d never done that before. But it probably won’t be the last time.
A few weeks ago, we took a 35% stake in InnoGames, an online games developer and publisher. We have an option to go up to 51% next year, and to increase our shareholding even further over time.
But don’t you guys work in TV? Yep, we do. We’re super-proud of our broadcasting business, which has the industry’s largest content portfolio and delivers multi-screen experiences to viewers across Europe. What we’re doing with InnoGames is part of MTG’s strategy to transform into a leading digital entertainment provider.
We’re already the world’s biggest esports company – our ESL and DreamHack businesses will engage over 250 million fans in 2016. At the same time, our multi-platform networks (MPNs) Zoomin.TV and Splay generate 2.5 billion online views every month, 25% of which relate to gaming content.
So you could say gaming is a thread that already runs through our digital portfolio. It’s a multi-billion-dollar industry, with more than 2 billion players worldwide. For us, it therefore makes perfect sense to add gaming as our third digital entertainment vertical alongside esports and MPNs, giving us huge opportunities to create cross-promotions and synergies.
We will continue investing in all these areas. Of course, there are a whole bunch of games companies around – including some great ones at SUP46. Here are four reasons why we made InnoGames our first move in this space:
- Amazing games. InnoGames’ titles such as Elvenar, Grepolis and Forge of Empires have generated more than 150 million registered players.
- A proven financial track record. InnoGames has been profitable from year one and margins are high and stable. The company’s revenues have grown 20% every year for the last three years, and should hit EUR 125 million in 2016.
- A sustainable model. InnoGames operates a 100% free-to-play model with revenues coming from in-game purchasing. It develops multiple cross-platform titles, rather than a single blockbuster. And the games constantly evolve, keeping players engaged for years.
- Successful in mobile. Mobile is the fastest growing gaming segment, thanks to large audiences and more paying players. Today, 50% of InnoGames’ new users register on mobile platforms, and the company has some really exciting mobile-only titles in development.
All these things were really important in our decision – but don’t take this as an exhaustive checklist. As an entrepreneur myself, I know that the most successful start-ups are often those that break the rules completely.
Every rule, that is, except one.
Whatever your business, you have to love what you do. It’s about feeling an urgent hunger to disrupt everything – you wake up each morning wanting to change the world.
Passion, in other words, is at the heart of the entrepreneurial spirit. InnoGames has it. MTG has it. And so do the companies in which we’ll invest next.
/Arnd Benninghoff, CEO at MTGx