Swedish gaming giant MTG buys Indian games developer PlaySimple for $360 mn

Acquires 100% in cash-and-equity deal that will significantly strengthen the company's position in casual games' genre and enable access to fast-growing word games genre

Swedish gaming giant Modern Times Group (MTG) has acquired a 100 per cent stake in Bengaluru-based word games developer PlaySimple for $360 million in a cash-and-equity deal.

“We’re very happy to welcome PlaySimple to our family of gaming companies,” said MTG’s Group President and CEO Maria Redin.  “PlaySimple is a rapidly growing and highly profitable games studio that quickly has established itself as one of the leading global developers of free-to-play word games, an exciting new genre for MTG.”

Redin said an experienced management team and focused, data-driven operating model has allowed PlaySimple to develop multiple game hits especially popular with the growing global audience of female gamers. She said the company has a pipeline of several exciting new games, some of which are card games, a new genre for PlaySimple.

MTG said the up-front consideration amounts to approximately SEK 3,090 million (on a cash and debt-free basis) and performance-based earn-out payments amount to an expected value of SEK 1,287 million in aggregate. Since December 2020, MTG has, with the acquisitions of Hutch, Ninja Kiwi and now PlaySimple, been accelerating the buildup of a highly attractive gaming vertical which on a pro forma basis generated revenues of approximately SEK 4,421 million in 2020 and SEK 1,158 million in Q1 2021 with monthly (MAU) and daily active users (DAU) of approximately 30 and 6 million respectively.

“We’re delighted to join the MTG family – MTG’s approach to investments offers us creative freedom, and the opportunities created by the GamingCo really resonate with our team,” said PlaySimple’s co-founder and CEO Siddharth Jain. “We’re excited to have found a new home for our company, one where our team can learn and grow alongside our fellow companies.”

PlaySimple co-founders and management team members Siddhanth Jain, Suraj Nalin and Preeti Reddy jointly said as they join the MTG family, they look forward to leveraging their proprietary technology across MTG’s gaming portfolio. They said this would also help in expanding into the European market, investing in cutting-edge technology and building exciting new games.

The acquisition of PlaySimple marks an important next step in the build-up of a diversified gaming vertical with high-quality gaming companies and is in line with MTG’s strategy to drive value creation through organic growth and strategic M&A. Scaling and diversifying the GamingCo helps to accelerate the operational performance while at the same time creating a more stable business.

The acquisition of PlaySimple is a perfect fit for MTG as it will significantly strengthen the company’s position in the casual games’ genre and enable access to the fast-growing word games genre. PlaySimple will strengthen MTG’s position amongst the female gaming audience while also enabling access to the strategically important talent pool in India.

“Acquisitions are a strategic part of our value creation story,” said Redin of MTG. “Through the acquisitions of Hutch, Ninja Kiwi and now PlaySimple, MTG has built a highly attractive games portfolio that is significantly more diversified in terms of genres, audiences, and revenues, which provides improved visibility, stability and opportunities.”

PlaySimple has a highly experienced and data-driven management with a proven track-record of developing multiple highly successful free-to-play games with over 75 million installs and 1.9 million DAU (daily active users) across its titles. It has developed best-in class advertising infrastructure, providing opportunities for improved monetization, more efficient user acquisition and cross-promotion throughout MTG’s gaming vertical.

PlaySimple grew its revenues by 144 per cent in the 2020 calendar year to SEK 706 million ($ 83 million) with an adjusted EBITDA of SEK 154 million ( $18 million). The strong momentum has continued into 2021 with estimated H1 revenues of SEK 510-540 million ($60-64 million), up approximately 82  per cent, and an estimated adjusted EBITDA increase of 140  per cent  to SEK 145-155 million ($17-18 million), compared to the corresponding period last year

Following the acquisition of PlaySimple, MTG’s gaming vertical has become a diversified global gaming group with companies across Europe, North America, and Australasia. The gaming vertical now holds strong positions in the city building and strategy genres through InnoGames, mobile racing through Hutch, idle games through Kongregate, tower defense through Ninja Kiwi, and word games – with card games soon to follow – through PlaySimple.