Scopely acquires Disney’s FoxNext Games, maker of Marvel Strike Force

Scopely, the mobile gaming company behind titles like Star Trek: Fleet Command, announced that it has acquired FoxNext Games Los Angeles from Disney.

Disney acquired FoxNext Games, a relative newcomer among Hollywood studio game divisions, as part of its acquisition of Fox for $71 billion in March 2019. I heard the estimated purchase price was $250 million, but the company would not confirm that.

This acquisition comes on the heels of Scopely’s recent $200 million round of funding. It’s the first example of how the company is using its strategic financing for acquisitions, with the focus on expanding its already diverse portfolio of games across new genres and intellectual properties.

As part of the deal, Scopely has agreed to buy the Los Angeles studio of FoxNext Games, which made Marvel Strike Force, and Cold Iron Studios in San Jose, California. In an interview, Scopely chief revenue officer Tim O’Brien said that Cold Iron Studios will be put up for sale as the company finds a more appropriate home for its upcoming Alien first-person shooter game for consoles and the PC.

“When we first sat down with them last summer, it was pretty clear there were a lot of synergies and over time it became undeniable this was the perfect asset for us to acquire,” O’Brien said.

FoxNext Games Los Angeles has 200 employees, while Cold Iron Studios has 50. Scopely itself now has 800 employees. Back in October, Scopely had 450 employees, with 400 additional people working on Scopely games at external development studios.

Scopely did not purchase FoxNext’s Fogbank Entertainment studio in San Francisco, which Disney did not include in the sale. Fogbank made the StoryScapes mobile game.

FoxNext Games Los Angeles released its debut title, Marvel Strike Force, in March 2018, and it has become a strong performer on iOS and Android, bringing in more than $150 million in its first year. The studio is also developing Avatar: Pandora Rising, a massively multiplayer strategy game based on James Cameron’s Avatar film. O’Brien also said that Marvel Strike Force generated $180 million in 2019, and it had grown for seven quarters in a row since it launched.

The acquisition does not include the separate portfolio of Fox IP licensed games titles, which will continue to be a part of Disney’s licensed games business. Disney acquired FoxNext Games and licensed titles in its 2019 acquisition of 21st Century Fox.

“I’m extremely proud of what our talented team at FoxNext Games has built and accomplished in just a few years,” said Aaron Loeb, FoxNext Games president, in a statement. “And look forward to joining forces with the impressive team at Scopely, who have a well-deserved reputation as one of the preeminent companies in the free-to-play games arena.”

Upon completion of the transaction, Loeb will join Scopely in a newly created executive role, and Rahimi will lead the FoxNext Games Los Angeles studio within Scopely as president of games.

Loeb and his team have been troopers throughout the process of finding a home for the studio. It started out as a studio under Kabam, and then was transformed into Aftershock as Kabam dismantled itself. Then it was sold to Fox, which then sold itself to Disney, and now it is finding a home in Scopely.

The acquisition agreement follows a number of recent milestones for Scopely including the achievement of more than $1 billion in lifetime revenue last summer, the acquisition of Digit Game Studios, and global expansion across Europe, Asia and North America.

Sensor Tower, a mobile measurement firm, said Marvel Strike Force has been installed more than 26 million times to date. And FoxNext’s newest title, Storyscapes, has surpassed 1.7 million downloads.

Avatar: Pandora Rising, currently testing in Canada, has seen approximately 100,000 installs, Sensor Tower said.

Update, 1:25 p.m. Pacific on Wednesday: Added new information from interview. Updated 10:33 p.m. with estimated purchase price and corrected employee number.