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Nicholas Lovell
Home   >   Analysis and Opinion   >   Analysis   >   Bigpoint gets bought, but for half a billion dollars less than its most recent investment valuation, a fall of over 80% in 5 years

Bigpoint gets bought, but for half a billion dollars less than its most recent investment valuation, a fall of over 80% in 5 years

By on September 28, 2016

In April 2016, lots of sites reported that Germany’s Bigpoint, one of the pioneers of browser and F2P gaming, was bought by Chinese firm Youzu Interactive, for Eur80m ($89.7m). They bought into the PR spin that this is a sign of the globalisation of the $100 billion game industry and most parrot the line that “Bigpoint is poised to launch Hocus Puzzle, with a marketing budget in excess of €30m globally, or $33.6 million.”

What no-one is reporting is just how far the valuation of Bigpoint has fallen since the heady days of 2011.

In April 2011, Bigpoint shares worth $350 million changed hands, valuing the company at $600 million. Investors Peacock (the investment fund of GE/NBC Universal) and GMT sold some, but not all, of their stakes to TA Associates and Summit for $350 million. None of the money went to the company, but by my estimations, Peacock and GMT bought about 70% of the company for $80 million in 2008 and sold 60% of it for $350 million in 2011, a return of 5x over 3 years (they retained a stake of, by my estimations, 10%). Which is pretty good.

Meanwhile, TA and Summit bought an estimated 60% of Bigpoint in 2011 for $350 million at a valuation of $600 million and sold it all five years later for $90 million, a fall of over half a billion dollars and over 80% of the value. That’s a huge fall.

It’s amazing how few journalists noticed.

 

 

PS I wrote this article at the time of the deal, but somehow failed to hit Publish. I thought that the analysis was useful enough to put up for public record.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com