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Modern Times Group joined the game-studio acquisition whirlwind last week with its (up to) $375 million purchase of mobile racing game maker Hutch.

The deal comes shortly after Electronic Arts agreed to buy racing game maker Codemasters Group for $1.2 billion, after Embracer Group acquired a dozen game studios, and after Microsoft agreed this summer to buy ZeniMax Media (Bethesda) for $7.5 billion.

The Stockholm, Sweden-based MTG also recently bought another 17% ownership in Germany’s InnoGames for $130 million, increasing MTG’s overall ownership stake to 68%. MTG also owns the esports companies ESL and DreamHack, as well as indie games publisher Kongregate.

The mobile game industry has grown rapidly in the last 12 months, with data from mobile app intelligence leader Sensor Tower revealing that the first three months of 2020 marked the largest quarter for mobile game downloads ever, with more than 13 billion installs across the App Store and Google Play.


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I spoke with Maria Redin, who was appointed CEO and group president of MTG in September. We talked about the deals and the huge surge in M&A activity in games, which has seen huge growth during the pandemic. Redin’s strategy is to build or buy. That means the company will grow organically by making its own games, but it will also acquire studios when the opportunity arises. The London-based Hutch was a good target, as it has more than 100 people and generated $56.3 million in revenue in the first nine months of 2020.

The funds behind Hutch were Backed VC, Index Ventures, and Initial Capital. And now they’ll be able to invest more money in the game ecosystem. So the acquisition cycle is fueling more activity. I talked with Redin about the growth in game deals and the company’s strategy.

Here’s an edited transcript of our interview.

Above: Maria Redin is CEO and group president of MTG.

Image Credit: MTG

GamesBeat: Can you tell me about your background?

Maria Redin: I’ve really been born and bred within MTG. I started at the company 16 years ago. I’ve done many different roles. I worked in online betting. I worked on the more traditional broadcasting side. I’ve been in different group functions for the last eight or nine years. I took on this role now as CEO in September. I was the CFO for five years before that. I was part of the bigger MTG before we split and spun out the broadcasting part. But it’s much more exciting to follow the digital path with esports and gaming. That’s where I chose to go.

GamesBeat: What’s the general strategy here?

Redin: It’s fair to say that it hasn’t been a straight road since we split the company in two about a year-and-a-half ago. We had a big review about this time a year ago, where we looked at the closure in the report that came out. Our focus after that review is to drive value to the two verticals we have, in gaming and esports. That means we’re going to focus on both organic and inorganic growth.

This is a step in that process. It’s a twofold transaction we did this week. First, we did the increase in ownership in InnoGames by 17 percent, and then rolled them up to create a jointly owned gaming company. We want to own the asset. Then we did the acquisition yesterday.

GamesBeat: How much was the additional investment in InnoGames worth?

Redin: It was an option as part of the first agreement. That was valued at $130 million.

GamesBeat: And this one is $275 million up front. That’s pretty serious.

Redin: It’s a great asset. That’s why we’re very happy. For us it’s important, as I said, that we build value in both our verticals, in esports and gaming. For our gaming vehicle, InnoGames is by far the biggest asset. Forge of Empires is performing very well. It’s one of the main supporting games of that vertical. We want to diversify now. We want to focus in mid-core and casual, but still diversify. Hutch covers many points as far as the kind of company we’re looking for.

Above: Hutch Games has racing games such as Rebel Racing.

Image Credit: Hutch

GamesBeat: And you’re still focused on mobile games?

Redin: Yes, mobile free-to-play, and the casual and midcore segments.

GamesBeat: What do you generally see happening in gaming right now? There’s so much activity. The Game Invest people said there were $20 billion worth of transactions in the first nine months of the year. Why does it make sense to do this now?

Redin: The competition is increasing. There’s a consolidation game going on, quite clearly. Of course we’ve seen during the pandemic, and in the lockdowns particularly, a surge in demand for content and entertainment. Digital entertainment in the form of video games, and especially mobile games, is a very relevant form of entertainment. We believe we’ve found a quality asset in Hutch, where we see great potential in them, and we’re excited about that acquisition.

GamesBeat: How many people are you picking up now with Hutch Games?

Redin: They’re around 100 people. It’s still very much predominantly made of up developers. They’re very lean everywhere else. We see the roll-up we did with the InnoGames founders, making sure we create a co-owned gaming holding company — we see very good synergies when it comes to UA, live ops, BI, and so forth.

We still believe in a decentralized model, where we want to empower entrepreneurs and founders to build their strategy. We bought Hutch because Hutch is Hutch, for the company culture that they have and that they’ll keep building. But where we can help accelerate their growth through cooperation between these sister companies, of course we want to do that.

GamesBeat: Is there a capital infusion that’s needed for Hutch?

Redin: It’s more about know-how. The interesting part about mobile gaming in general, there are two dimensions. The first part is game creation, building a game, the art and the creativity. But the other part is process-driven, when it comes to UA, BI, and live ops. That’s where you see InnoGames — over the last five or six years, they’ve developed a sophisticated set of processes and systems for that. It’s a good opportunity to share know-how between InnoGames and Hutch.

Above: F1 Manager is one of Hutch’s mobile games.

Image Credit: Hutch

GamesBeat: Do you see MTG as having a European focus, or a global focus, or some of both?

Redin: It’s very much a global focus. If you look at the companies we hold, it’s more European. Hutch is obviously based in London. InnoGames is in Hamburg. ESL is in Cologne. Kongregate is the only company we have in the United States. But if you look at the demographics of the players, it’s very much an even split between Europe and the U.S.

GamesBeat: Do you expect your acquisition side to be more active in the future, or do you also expect to just invest in some of the game startups that are springing up?

Redin: As I said, it’s important to drive a combination of organic and inorganic growth. It starts with organic growth. That’s why we’re very excited about where we stand today. It’s not a secret that InnoGames has not been able to roll out a successful new mobile-first game launch in the last couple of years. Where we stand right now, though, we have four games in development at InnoGames, and we feel strongly that we have at least two successful game launches in the next year. Hutch has three games in the early growth phase, and a fourth game, Puzzle Heist, due to come out live in early 2021. The same is true of Kongregate. We’re on very firm ground on an organic basis. There’s always room for improvement on the marketing side, especially with Hutch, if you look at how they do marketing versus how, for example, InnoGames does marketing.

We’ll continue to scout out M&A opportunities in order to accelerate that growth and complement it. But we’ll still be focused in the casual to mid-core segment.

Above: Top Drives is one of Hutch’s mobile racing gmaes.

Image Credit: Hutch

GamesBeat: Back on the broader market, I do wonder whether you see things as uncertain now, or whether the trends we see now will continue. Are we in a window of time where the market is going to behave a certain way, and then it’s going to change again within some predictable range? Are we in a window where consolidation makes a lot of sense, or is that what’s going to keep happening?

Redin: There’s always going to be room for smaller independent developers. There’s also a lot of benefit in consolidation. We can enjoy the synergies that I mentioned around things like UA, live ops, BI, and so forth. It takes quite a lot of resources to properly invest and build those up. Gaming is really two different parts when it comes to game creation versus game monetization and user acquisition.

As to whether we’re in a window or not, that’s the beauty. You always need to be on your toes to pick up on new trends and see where the market is moving. But great games are great entertainment. There will always be a place for that.

GamesBeat: Overall, how many people does MTG have now?

Redin: We’re quite lean nowadays. At headquarters we’re around 15 to 17 people. We want to stay lean at headquarters and focus on the core competences we should have there. Then we want to build the operations in our portfolio companies, both on the gaming and esports sides. They focus on their operations while we focus on the strategic picture, M&A, and follow up with business operations for them. Across all of our portfolio companies, we’re just north of 1,000 people. But that includes both gaming and esports.

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