ADAG owned Reliance BIG Entertainment has agreed to acquire 50 percent shareholding in UK based Codemasters, a PC and console gaming company with major franchises like The Ashes (Cricket), Formula 1, Dirt2 and Race Driver Grid (racing), among others, and annual revenues in excess of US$ 150 Million. The other 50 percent is held by Balderton Capital, which had first invested in Codemasters in 2005, apparently with the intention to take it public. With this deal, BIG Entertainment has become the second Indian media company to enter the high-risk PC and Console gaming market, after UTV invested in UK based publisher Ignition Entertainment and MMOG company TrueGames. This deal is interesting for several reasons:BIG Entertainments gaming business Zapak, which is overseeing this investment, has focused largely on casual games and multiplayer online games, cafes and distribution; from what I remember hearing on numerous occasions, they have consciously eschewed the PC and console gaming market in India, and invested heavily in the online and cafe gaming business. Globally, PC and Console gaming dwarfs the online and casual games business; this is clearly a massive expansion of mandate for Zapak: a new, larger dimension, a much bigger, global playing field. Secondly, the console and PC gaming business is significantly front-loaded: like films, it requires a lot of investment up front, is heavily dependent on development and marketing, and hits can yield riches, but the risk of flops is high. To their credit, Codemasters does have successful franchises like Ashes 2009, Dirt and F1 2009.…
