Anil Ambani’s Reliance Group has sold its 60% stake in video game publisher Codemasters for Rs 1700 crore, Economic Times reports. The Rs 1700 crore price tag represents a 25 times growth in valuation for the British video game maker. In 2009, the group had acquired a 90% stake in Codemasters, best known for its racing video games, for Rs 100 crore.
The shares have reportedly been offloaded to about 30 institutional investors in the UK and Europe and had attracted bids of over Rs 5,000 crore. The deal, part of Codemasters’ public offering, will see its shares listed on the AIM sub-market of the London Stock Exchange (LSE) the ET report added. Based on the deal value, the Reliance’s remaining 30% stake is worth Rs 850 crore. Codemasters management, led by CEO Frank Sagnier, holds the balance 10%.
Codemasters’ focus on racing games
Codemasters is one of the few mid-tier developers that survived the switch to the current generation of consoles as rising development costs and change in business practices claimed companies like THQ. The early part of this decade saw top-tier studios like Electronic Arts (makers of FIFA, Battlefield), Activision (makers of Call of Duty), Take-Two (makers of Grand Theft Auto) grab a lion share of the market. The remaining portion of the market was grabbed by a diverse set of independent developers working on creative low-cost games, effectively squeezing out companies like Codemasters.
So how did Codemasters survive and see such a massive growth in valuation? By sticking to what it does best, racing games. In 2015 following the failure of games like Battle Decks and Overlord Fellowship of Evil (these were virtual card games that can become a cash cow by charging micropayments from consumers for ‘rare’ cards and items) Codemasters decided to recalibrate.
A Codemasters spokesperson had told Eurogamer then, “While it’s been great to explore projects outside of racing, we know that our hearts belong to racing in all its many glorious forms. The success of DiRT Rally’s Early Access programme has been incredible, F1 2015 was very successful reaching number one in many territories, we’ve recently announced that Micro Machines will come to mobile and we have a strong roadmap ahead of us that keeps racing as its razor focus.”
