The shareholders will probably want some instant profit, so negotiations would probably start at US$135 million at minimum. Bluntly, I don't think Falcom makes big enough games for anyone to stump up that kind of money.
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Sony paid $229 million, mainly in cash, to acquire Insomniac Games in November 2019
- Thread starter Kolx
- Start date
I don't believe I've ever said that....companies generally sell for more than their public value (because you have to make it worthwhile for the owners), but double would be pretty extreme.
MS hasn't payed anything like that for a studio since Rare.
I agree. I kind of hope that SIE would just contract them to make a title. As shown by YS 8 and 9, Falcom makes some great story and gameplay but lacks budget.
However, after the failure of WKC, SIE probably is not interested in this sort of thing any more.
No but good business people would shop around try and get the best price and I think Insomniac would have good business people.
When they say cash, they don't literally mean notes. They mean cash as opposed to stock or other assets.
Will it? They don't actually make $59.99 per game, especially since Spiderman has seen a lot of bundles and it's been on sale a lot. Add in the cost of developing a new one too. Definitely a worthwhile investment, but one game isn't going to recoup the cost.
::Hits head::
Duh, yes of course. Besides them.
I always think of that like buying Minecraft, not buying Mojang.
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For comps, I have my team pull data from SDC Platinum, which is the Rueters M&A/funding acquisition database. I've not worked on a gaming specific deal in a bit, but they're around there (and a re-pull would take time to dial in and pull again). They're always on a range though. If you wanted a more public facing database, you could check out Crunchbase and compare purchase amounts to Owlers revenue estimates, although that's *super* spotty and I dunno if the free version can do that easily.
Basing it off current security information, Falcom is worth closer to ~75M(usd), as their enterprise value is considerably less than their market cap.
Also the "that seems low" sentiments seem... strange?
Developer acquisitions like this are always pretty risky, especially when there's no real valuable IP coming along with it. I have to assume there's some long term contracts in place for the main talent because otherwise you could just have an exodus and you've paid hundreds of millions for an empty shell.
Developer acquisitions like this are always pretty risky, especially when there's no real valuable IP coming along with it. I have to assume there's some long term contracts in place for the main talent because otherwise you could just have an exodus and you've paid hundreds of millions for an empty shell.
I could think of 2 reasons and it involves a Lombax and a Niche Man.
Oh i know. Just wanted to know if you used data from the industry or just available on the internet. Thanks for your input.
( Btw I'm just starting interviews for IB position. I'm (not) ready for the madness eheh )
What about non-classical game studios such as Playground Games? MS didn't disclose ammounts, so my guess is PG was around 100-150M (3-5 x 30M estimated revenue) for instance.
Anyways, that's a nice get for a nice price.
What ip does Insomniac have that's one of the biggest in the world?
That's so odd. They've been a quality developer for years and years. If it really was just one interested party saying take it or leave it, then that may explain the price. Oh well, they've got the security they need now and Sony got a helluva bargain.
I mean, you're not wrong but the IPs Insomniac owned were practically worthless in the grand scheme of things. Sony did not acquire them because they were clamouring to own the likes of Sunset Overdrive, Song of the Deep or Fuse. All the successful stuff Insomniac has ever worked on has belonged to bigger corporations.
Good business people wouldn't ditch Spiderman and Ratchet lol
They ditched spiderman? Didn't Sony own the videogame IP for Spiderman after Activision?
Also we don't know the full circumstances to determine whether selling rachet was a good or bad decision for them.
I don't think it was a "take it or leave it" situation but more of a "we gel well together and you offer isn't that bad" type of deal.
Out of the studios that MS brought, the only one I see commanding over $200 million is Playground due to their continued success.
You're reading the conversation wrong, what that person is saying (I think) is that if Insomniac had been acquired by anyone other than Sony they would have lost access to Ratchet & Clank and Spider-Man.
Can't a different company just swipe the talent though. Offer each employee a 1.5 million signing bonus. If theoretically all 200 employees decide to leave then thats 300 million already. Then name the new studio insomnia.
While Sony already owned Ratchet & Clank and Resistance, neither franchise would flourish without Insomniac Games. So, while they didn't acquire any important franchises, they invested in and strengthened ones they already owned. The reason we haven't seen a Resistance game this gen (what is this "burning skies" you are talking about) is probably that Insomniac were working off for Phil and Mark. We had one rushed Ratchet & Clank game this gen compared to over half a dozen last gen. Thanks to this investment, Insomniac can keep those borderline dormant franchises alive. And hopefully make more new IPs and Spidey.
So, I'd argue that they did sort of gain some important IPs from this acquisition. A dead IP is not valuable.
So, I'd argue that they did sort of gain some important IPs from this acquisition. A dead IP is not valuable.
I see.
I still think more money from MS or Sony would of be the better outcome for them, however they got a pretty good deal getting $229 mil, being part of PlayStation and working on spiderman.
Ah ok. I've also used 451 Research, which is specific to tech deals, and CapIQ, which is your all-rounder for financial info. They're both less intense/less comprehensive than SDC though. Have fun with the interviews! Memorizing DCFs formulas and all that.
I'd still put Playground is a classical studio - by classical, I mean "primarily makes single sale games", as opposed to, say, a company which gets a substantial part of their revenue from engine sales or mobile or has a huge GaaS contingent. Still, I'd say that range isn't impossible, since there was probably less shopping around given their history.