Scopely is the the mobile gaming company behind titles like Star Trek: Fleet Command, and it took a step up into the big leagues this week with its agreement to buy 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 spoke with Tim O’Brien, the chief revenue officer at Los Angeles-based Scopely, about the deal. He said that Scopely picked up 200 employees with the FoxNext Games Los Angeles Studio and 50 more with Cold Iron Studios in San Jose, California. But he noted that Scopely is going to sell Cold Iron Studios, as it is making a PC and console game based on the Alien franchise that is outside of Scopely’s focus.
Scopely also didn’t buy Fogbank Entertainment, a studio in San Francisco that made the Storyscape mobile game. We also spoke about the strategy to go big in the $100 billion mobile game market.
Here’s an edited transcript of our interview.
GamesBeat: What was interesting to you about acquiring FoxNext?
Tim O’Brien: We’ve known Aaron [Loeb] and Amir [Rahimi, both leaders of FoxNext Games] for a long time. We’re big fans, early fans of their games. We’ve been watching their careers and what they’ve done. We think we have a very shared vision of how to build free-to-play games, a very player-first approach. When we first sat down with Aaron and Amir last summer, it was pretty immediate that there could be some great synergies and shared vision around what we want to do moving forward. We went through the process, and over time it became undeniable. This was the perfect asset for us to acquire and a team that we had to be in business with.
GamesBeat: Can you walk me through a bit about what you did and didn’t buy?
O’Brien: What’s coming with the transaction is the FoxNext studio in Los Angeles and the Cold Iron team in San Jose.
GamesBeat: Cold Iron is the one doing the Alien property?
O’Brien: Yeah, they’re building a free-to-play console and PC Aliens shooter game.
GamesBeat: That leaves out one entity, right? The San Francisco team.
O’Brien: Right. The Fogbank studio did not come with the transaction. They had recently released a game called Storyscape.
GamesBeat: Was there a reason for not picking up that studio as well?
O’Brien: Disney decided that it wasn’t coming with the asset. They’re fielding all the questions on that moving forward.
GamesBeat: How many people do you pick up? How many people does Scopely have after the deal is finalized?
O’Brien: There’s a little bit under 200 people in the L.A. FoxNext studio, and there’s about 50 people at Cold Iron. Scopely has 800 globally now. The combined entity will be more than 800 people altogether.
GamesBeat: Were there Fox-related licensed games that did not come with this?
O’Brien: Yes, there were. The only things that came with the asset were Marvel Strike Force, the Avatar game, and the Aliens project at Cold Iron. Any other licenses are not coming in the transaction. Originally FoxNext was the gaming arm of Fox, with all of their licenses, and that’s rolling into Disney now. The licenses for Marvel and Avatar come with the transaction, obviously.
GamesBeat: Are you saying anything about the purchase price?
O’Brien: We’re not. I can give you some things on how well Marvel Strike Force is doing, though. They did $180 million in revenue in 2019, with seven quarters of consecutive growth in a row. The game’s grown more than 70 percent since launch and just had its biggest month last month, so we’re excited about joining forces with the scale of that game.
GamesBeat: As far as how the executives mix together, is there any clear information on that? I know certain titles have been assigned, but do you have anything more to say there?
O’Brien: That’s one of the interesting things. When we got in and started looking at the team, they’re set up very similarly to us from a publishing perspective. They embed their marketing teams. They think about lifecycle marketing very much like we do. From a day to day live operations and global audience-building perspective, it will stay relatively the same. Hopefully some of the infrastructure we have as a company, our global reach, can help them continue to scale the business.
From an executive standpoint, there will be some people from FoxNext that will move into Scopely, which we’re excited about. Another reason we like the asset and the team — Amir will become president of games, overseeing the FoxNext portfolio, and Aaron will take a senior executive role here at the company that we’re still working out with him. He’ll play a broader portfolio-level role.
GamesBeat: It’s not just a parallel operation, then.
O’Brien: Absolutely not. A number of their people are going to come and take big, central roles at Scopely. There’s some great talent there. Combined, we’ll be an even more attractive place for people. There are some great synergies.
GamesBeat: For you this is a sort of doubling-down on some things. I can see the internal development, the bay area and Los Angeles talent, and the Hollywood-oriented properties. How else would you describe this as far as what Scopely is doubling down on?
O’Brien: One of the key parts of our growth and M&A strategy moving forward is to find world-class development teams, we found one who is literally our neighbors, who have a shared vision and are aligned behind the strategy we want to execute over the next couple of years. It’s pretty rare to be able to pick up an asset like Marvel Strike Force that’s been scaling so well. It has amazing retention numbers. We’re excited about being in business with Marvel. We do love working with big triple-A franchises, the value it brings on the audience side.
But ultimately it comes down to, these guys are just great game-makers. We want to have world-class studios in our portfolio building great games in the future. That, plus the leadership. To have people like Aaron and Amir joining the company, injecting more of that game DNA into Scopely — which we already have a tremendous amount of — it just worked across all fronts. We’re really excited today.
GamesBeat: Does it also tell us anything about Hollywood in general stands with games, around things like internal development and licensing?
O’Brien: I don’t know. I think that Disney has a certain strategy they’re executing on. For us, we’re the partner of choice for big media companies and IP holders. We’re who they want to do business with. This obviously puts us in business with Disney, which we’re excited about. I like our track record of building games based on IP and the success we’ve had there across multiple games. We’ve had that level of success across multiple categories of triple-A IP. It’s all aligned behind our global strategy moving forward.
GamesBeat: What’s the status on the Aliens game and the Avatar game? Avatar is in testing right now, isn’t it?
O’Brien: Yeah, Avatar has been in beta for a number of weeks. The KPIs are very strong. Retention numbers are great. We’ll still remain in beta for the time being and launch at some point in the future. The game is beautiful. You can play it live in Canada. We’re very excited about it.
As far as Cold Iron, it’s a great development team of industry veterans. We believe in their vision for where free-to-play on PC and console is headed. We feel that they’re best positioned to realize their visions with a different partner in the space, though, so post-transaction we’ll be looking for a new home for the Cold Iron team. Scopely and FoxNext combined will be a very mobile-first company, and so a console and PC shooter doesn’t really align with our content strategy, today. We’ve spoken to the management team there and everybody is aligned with finding a new home for the studio.
GamesBeat: That means they’re up for sale one more time, then?
O’Brien: That’s correct.
GamesBeat: It’s nice that Aaron Loeb has finally found a home.
O’Brien: [Laughs] Me and him, Walter and Javier, we all get along really well. The DNA and his creative leadership will be perfect for Scopely. He’s here in Los Angeles. It makes a lot of sense.
GamesBeat: He’s been through a record number of transactions, I think.
O’Brien: He may hold the record, that’s true. I don’t know. That L.A. studio has been together for a long time, though, and we really like that. Development teams that have been building games together for that many years have so many synergies. They really know what they’re doing. We admire that about their studio.
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