Variety returns in-person for its annual Entertainment & Technology Summit, presented by City National Bank. This one-day event will explore advancing technology’s impact on TV, film, gaming, music, digital media and consumer brands.
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00:00So, Tim, thanks for joining and I wanted to get in with you on Scopely, which for those
00:09who don't know, let me just set the stage.
00:13This is the biggest mobile game company in the US.
00:17We're talking about a business that reached 500 million Americans in the last six months.
00:23That's, you know, 40% of the population had some exposure to some of the games that we're
00:29going to be talking about, $10 billion in lifetime revenue that they reached this year.
00:37So this is quite a growth story and intellectual property is a big part of that.
00:43You have been instrumental in the deal making, I believe nine deals over the last six years
00:52that have been a big part of this growth story.
00:54So let's get into it.
00:58Starting with, on the deal making front, what is the market like right now in terms
01:05of the climate for the kind of deals that you do?
01:08Is it conducive to deal making?
01:11Yeah, thanks for the introduction.
01:15I would say that, you know, the company is 12 years old, about a year and a half ago
01:19we were acquired by Savvy Games Group for about $5 billion.
01:24And up until that point, as you mentioned, we had done nine M&A deals to kind of continue
01:29to grow the company through, you know, product game launches as well as M&A and bringing
01:34new, you know, world-class talent into the ecosystem.
01:38But I would say for us right now, it's a pretty incredible opportunity actually, because the
01:44power of Scopely and Savvy Games Group is that, and Savvy announced this, that they
01:48had $38 billion to deploy.
01:50Just a little bit.
01:51Just a little bit.
01:52A few dollars.
01:53And what, and I think in the last year after, you know, partnering with Savvy, they've realized
01:59that our corporate M&A team and our kind of organization is the right place to deploy
02:03that capital through.
02:04And so in terms of the gaming market and the assets we're looking at, it's very attractive
02:08because ultimately you could join a business that's privately held.
02:12And so unlike the pressures of being a publicly traded company, you could come here, your
02:16creative talents, you're going to have tons of resources, global distribution.
02:20And so it's, it puts us in a really unique position to capitalize our market up to's
02:25right now.
02:26Now, I know you're not going to reveal your acquisition wish list, right?
02:29I'll give you the list right now.
02:30Sure.
02:31Okay, sure.
02:32Well, let's break out the spreadsheet.
02:33It'll appear on the screen.
02:34But if you could give us a sense of like, what are pockets of opportunity for Scopely
02:40as you look at acquisitions?
02:41Yeah, I think, you know, we're looking for world-class game development talent.
02:46We're looking for evergreen franchises.
02:49Franchises are extremely stable and ideally growing and at scale.
02:53You know, when you're doing multiple billion dollars of revenue, you can, and you have
02:57global kind of resources and infrastructure, you can add a lot of value to game teams that
03:02are either earlier on the process or that have already released, you know, large franchises.
03:09And I think that, you know, because of our marketplace condition and the launch of Monopoly
03:15Go, which we launched last, you know, April in 23, which was the biggest mobile game launch
03:20in history, I think that that's put us in a very unique place that, you know, most development
03:28talent, if you're looking to exit or partner up to go even bigger, we're the right place
03:33to be.
03:34Now, you mentioned Monopoly Go.
03:36This has launched, I think it was last year and has since generated about $3 billion in
03:42revenue.
03:43Hasbro CEO, Chris Cox, recently likened it to, you know, having like a blockbuster movie,
03:50although I think it would be more like two or three blockbuster movies if we want to
03:54be accurate about it.
03:57You've been working with them a while.
03:58You've got a lot of partnerships that are sort of long term.
04:03How do you structure deals to be conducive to that?
04:06Yeah, I mean, the Hasbro, I mean, you know, when we started the company, we wanted to
04:12make sure that we had a diversified portfolio of games.
04:16We didn't want to just be one genre, one game.
04:18It was very important for us as a business.
04:20And also, we had a unique advantage being LA based and, you know, a few of us coming
04:24out of Disney and having spent a bunch of times in our career working on IPBs games
04:29that we thought that that market opportunity had been underutilized.
04:33And so Hasbro is a great example of an early partner.
04:37We licensed Yahtzee back in 2015, and it was a tremendous success, made more money
04:43than they'd ever made on the board game in the history in the first year of its existence.
04:49And that led to a license with Scrabble.
04:52And I think that the education process and the learnings from those two games together
04:57enabled us to evolve the relationship into something like Monopoly Go, which, you know,
05:03it was not an easy task, seven years in development, millions of dollars in development.
05:09Most IP holders probably would have given up because I think the old way of thinking
05:13for IP licensors and media companies was let's get the largest MG we can and give it to them
05:20for the shortest period we can.
05:22Now, not all were thinking that way, but a lot of them back in 15, 16 were.
05:26And I think the evolution with Scrabble and Chris's team was that ultimately it's more
05:30of a profit share model, which enabled us to spend a tremendous amount of money on marketing
05:34develop and gave us the time to produce something that, like you just said, made $3 billion
05:39in its first 15 months of being live.
05:41And by the way, we're just getting started.
05:44It's a live operated business.
05:45It'll go on for 10, 20 years.
05:48And the game that's playing, the game today, a year and a half later, has significantly
05:52better KPIs than when it launched.
05:54And so, you know, these are live services.
05:57We're operating them every day globally.
05:59And it's a pretty exciting time if you're an IP partner of Scrabble, yeah.
06:05There was an announcement today about a Monopoly Marvel crossover.
06:10So, you know, some of the IP you work with, like Star Trek, it's not even games.
06:16It's just straight Hollywood great IP.
06:20How does the outlook for those kind of deals look going forward?
06:27Well, you know, I mean, to be super clear, when I guess CBS at the time gave us that
06:33license in 15, they probably should not have given us that license in 15.
06:37We had one mid-core game and it was highly competitive, but they were a fantastic partner.
06:42They actually were forward thinking and putting a deal in place that made sense to be able
06:47to build a free to play live game.
06:50And that game's made over a billion in revenue, I believe larger than all the movies combined
06:54ever released for Star Trek.
06:57And it's live operating every day.
06:59I mean, if you're a Star Trek fan and you're waiting for the next movie or the next TV
07:03show, you know, you can go play Star Trek anytime, new universes, all the IP added into
07:10the game.
07:11So, they've been a, they've actually been one of our best partners, actually, in terms
07:15of forward thinking, leaning into enabling us to do things in the game that traditionally
07:19you maybe have not been able to do in games, mixed universes, mixed storylines.
07:23And so, it's been a tremendous success for both of us.
07:27More broadly speaking, I'm just curious to get your outlook on just the state of games
07:32today.
07:34The industry is an interesting time.
07:36It's in growth mode, but there's been a lot of turbulence and layoffs and such.
07:40But the marketplace seems like it's got a pretty bright outlook.
07:45Yeah, I think that like many industries, the games industries had a number, a large lot
07:51of layoffs in the last couple of years.
07:54We're very fortunate that we have not.
07:55In fact, we've been growing at an accelerated rate.
07:59And I think that the, you know, the forward thinking, more sophisticated gaming businesses
08:06that are set up that already have scale have a unique advantage.
08:09And then us having scale, global infrastructure, and 30 plus billion dollars in capital deployed
08:16to continue to consolidate world class game teams gives us a really unique advantage in
08:21the marketplace right now.
08:22And so, I think that we're just a, you know, we're a melting pot of talent right now coming
08:28into the business.
08:29But overall, I think games are here to stay.
08:31I mean, people continue to underestimate the size and scale and the amount of time spent
08:36in games.
08:37And just by giving you the Monopoly Go numbers, you can see the revenue kind of numbers coming
08:41from the most successful games in the market.
08:43So it's, I mean, I feel like I couldn't be in a better industry right now.
08:47I know there's a lot of great industries, but we're in a really great place right now.
08:52And you yourself are in a great place when you think about a owner who says, hey, here's
08:5838 billion dollars, which doesn't necessarily all go to Scopely, but it gives you a lot
09:05to do.
09:06Is there like, but still, is there a discipline that has to come with really putting that
09:10money to work in the best possible way?
09:13Yeah, I mean, it's, there's a lot of discipline that goes around applying capital, of course,
09:18especially when it comes via Sovereign Wealth Fund, ultimately.
09:21But I think that having the success that, I mean, between, you know, signing closed,
09:29we doubled in size when we were being acquired.
09:31And so that and the success of Monopoly Go and our, and I would say the working relationship
09:37between us and Savvy Games Group has been so good that we've been able to put in the
09:41processes in place, build the relationships we need to be able to build trust and efficiency
09:47to go out and deploy that capital.
09:49We haven't announced any large deals yet.
09:51We've done some smaller investments, but you'll hear about some coming up probably pretty
09:56soon.
09:57And, but yeah, I mean, it takes time to put the right processes in place when two businesses
10:01join together.
10:02But I think that, and, you know, and again, not all of the 38 billion dollars will be
10:06deployed through Scopely.
10:08They're also extremely active in the e-sports space, which we're not, and they've made some
10:12acquisitions there, and I would expect them to continue to do that.
10:15But yeah, I think that we've got a great team in place and trust built with our partners
10:22to go out and do some big things in the industry right now.
10:25With those partners, with Savvy, this is sort of like a hands-off, arm's-length thing.
10:30You're free to find the deals that you feel work for your company.
10:34Yeah.
10:35I think that we are, we are for sure the tip of the spear.
10:39So we have a global BD and corporate development organization out talking to game developers
10:42every day in China, Japan, South America, across Europe, and so we cultivate, find deals, find
10:50great teams that are maybe interested in rolling out, schedule investments, and then if something's,
10:55you know, at a certain size, we'll sit down with our partners, have a discussion, show
10:59them the thesis, show them all the financials, and then kind of keep, you know, have almost
11:03like a milestone basis kind of deal track going.
11:08But I think that we're very aligned, we spent a good amount of time aligning on the strategy
11:12of what we want to accomplish, which would be the largest games company in the world.
11:15And you know, we're out going ready to execute that right now.
11:19We talked about IP like Monopoly Go, Star Trek.
11:23Point to another success story that you think sort of illustrative of the company's strategic
11:28focus.
11:30Yeah, I think Marvel Strike Force is, it was a great, ultimate actually game that came
11:36via an acquisition of Fox Next, which was acquired by Disney, as you're all aware.
11:40So after Disney acquired Fox and Fox Next, they, as you're aware in your chart, they
11:48were no longer in the game development and game publishing business and they had evolved
11:53into licensing.
11:55And so we ultimately acquired the team and the asset, and we've grown it pretty well
12:02since then.
12:03Actually, we've grown it, you know, double digit percentage growth since then.
12:06And also it got us into business with Marvel, which has led to other things, i.e. the Monopoly
12:12integration with Marvel IP today, and brought in a really fantastic team that we've worked
12:19with over the last few years to develop that IP.
12:21And so that's a game that, you know, again, you know, you can go see a Marvel movie, have
12:26a great time for two hours, but if you're a hardcore Marvel Strike Force player, you're
12:30playing multiple hours a day, and the storylines, the characters, the outfits, it's all happening
12:36every hour in that game.
12:38So live services are very powerful, and Marvel and Disney recognize that, which is why they're
12:44still in the licensing business now.
12:47We've got a minute left.
12:48Give us a thought about 2025, what that year is going to be in terms of scope-ly.
12:54Well, I hope that we announce at least one, you know, mega deal.
13:02I think, you know, when I say mega deal, I mean, you know, like scale global franchise
13:07doing hopefully at least a billion dollars in revenue.
13:09I think we'll continue to execute on our current slate of games that are live, hopefully continue
13:15to grow those games.
13:17And I think that, you know, ultimately, we want to be an amazing place for talent to
13:25join, and so we make a tremendous amount of investment in the culture and all the things
13:30that are happening at the company on a daily basis, and then some education.
13:34You know, I think that even though I think that we're a relatively young company that's
13:39kind of spent 12 years making ourselves at the scale we are, but I think that there's
13:43still a lot of people that are unaware of our scale and the type of capital that we
13:48have to deploy and the type of deals we're doing.
13:50And so doing things like this, getting to know other people, I think is really important.
13:53So I'm glad you guys invited me here today, and thank you very much.
13:57There you go.
13:58Thanks a lot, Tim.