Modern Times Group (MTG) recently acquired London mobile racing game developer Hutch for up to USD 375 million. This follows MTG’s USD 130 million purchase of a 17% stake in Germany’s InnoGames, bringing its total ownership of InnoGames to 68%. MTG also owns esports companies ESL and DreamHack, as well as indie game publisher Kongregate. In an interview with VentureBeat, MTG CEO Maria Redin shared more details about MTG’s acquisition strategy in games. According to Redin, Hutch employs over 100 people and generated USD 56.3 million in revenue in the first 9 months of 2020. Here are some highlights from the interview:
Hutch meets MTG’s criteria for acquisition targets with strong product and growth potential
Redin said MTG is excited about the Hutch acquisition, which is important as MTG looks to build value in esports and gaming. While InnoGames has been MTG’s largest asset on the gaming side with success from titles like Forge of Empires, MTG now wants to diversify into more casual and midcore gaming. Hutch fits the bill in many ways in terms of MTG’s criteria for acquisition targets. Redin highlighted Hutch’s strengths and potential as key reasons for MTG’s confidence in the acquisition.
MTG seeks both organic and inorganic growth with focus still on free-to-play mobile games
Redin said MTG’s focus over the past year has been bringing value to gaming and esports through both organic and inorganic growth. Acquisitions are part of this process. The Hutch deal follows MTG’s increased ownership stake in InnoGames. Regarding organic growth, InnoGames has 4 titles in development, with at least 2 expected to be successful launches next year. Hutch has 3 titles in early growth stages, with new release Puzzle Heist expected in early 2021. Kongregate also plans new game launches. On the acquisition front, MTG will continue seeking opportunities, focused on casual and midcore gaming studios.
MTG provides expertise to help acquired gaming firms on user acquisition and operations
Redin explained MTG’s approach is to partner with acquired gaming firms in jointly-owned companies, providing help with areas like user acquisition, online operations, and business intelligence. MTG still believes in a decentralized model that gives entrepreneurs and founders strategic autonomy. However, MTG can also accelerate growth through cooperation. For Hutch, expertise and capabilities are more important than capital injection. Over the past 5-6 years, InnoGames has developed sophisticated processes and systems for user acquisition and operations. Now it can share this expertise with Hutch.
MTG will remain focused on esports and gaming with a lean corporate structure
Redin said MTG maintains a fairly lean corporate structure, with around 15-17 people at headquarters. MTG wants to stay lean at corporate and focus on strengthening core capabilities. In total, including invested and acquired firms, MTG now employs just over 1,000 people. This allows MTG to concentrate resources on esports and gaming while giving creative freedom to individual studios.
MTG views acquisitions like Hutch as key steps in its goal of building value in esports and gaming. While also focused on organic growth, MTG will continue seeking strategic acquisitions, especially of casual and midcore mobile gaming studios. MTG provides expertise to help gaming firms grow faster, while allowing them autonomy on game development.