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Roll backwards in the games industry: What was accumulated in a rush during the boom years now has to be put back on the market. Urgent.
Dear GamesWirtschaft readers,
Dear GamesWirtschaft reader,
The Easter Bunny dropped us some pretty breaking news just before the holidays. I had already taken a nice after-work bubble bath last night when suddenly my smartphone buzzed and the first links started ticking in. Which prompted me to interrupt the wellness process I had initiated, rush to the office and review the news situation.
And it looked like this: The Swedish publisher Thunderful is separating from the Düren-based indie games specialist Headup. Dieter Schoeller, who has built up the company since 2009, is buying the shares back after three years. Purchase price at that time: up to €11 million – €5 million in cash, up to €6 million on top if success-related criteria are achieved.
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Schoeller gets 'his' headup including 80 game licenses for a fraction of the original sum, namely €500,000. By offsetting contractually agreed claims, Thunderful will even have to pay off additional tranches amounting to millions in the coming years.
Why is that? Because Thunderful, like its competitors, is in considerable turbulence, as can be clearly seen in the share prices. The costs have to come down – and the quickest way to do that is to divest from investments and personnel. There is no room for emotional nonsense in this business. Thunderful was officially looking for a head-up buyer and cast several candidates. In the end, the choice fell on the founder.
The report caused quite a stir on Wednesday evening – which is also due to the person of Dieter Schoeller and his work for the German indie scene. The enterprising entrepreneur was regularly on stage at the German Computer Game Awards for good reasons, because the games he helped market and finance were successful with the juries – in 2014 The Inner World for example. Or 2019 with Trüberbrook, which was developed by the Cologne Bildundtonfabrik.
After the deal is completed, the indie publisher Headup will become a 'real' indie again. Owner-managed. Without the quarterly pressure hell of listed parent companies.
Schoeller is therefore right on trend. Because after years in which capital market-driven holding companies bought everything together that didn't quickly escape into the trees, we are currently finding… “Devistments” to a considerable extent. It was only announced today that Embracer – Europe's second largest games manufacturer – is destroying another pillar of its core business. When silverware like Gearbox is sold, even the layman suspects: it's burning.
Unless the evidence is misleading, then we will very soon see further management buyouts, spin-offs and reversals in the games industry in German-speaking countries. As was the case with the Hamburg game developer Daedalic Entertainment in 2020, where the management took back the shares from the Cologne-based Bastei-Lübbe-Verlag and thus regained full economic and creative control.
How does something like that feel? “Very cool”as founder Carsten Fichtelmann put it in an interview at the time.
When asked about the future viability of his company, Fichtelmann wrote: “That’s the beauty of life. If everyone stays healthy, we will have an answer to this in three to four years. Our goal is obvious, that one will then say. It was crazy and risky to buy back the shares, but it was the right step.”
Less than two years later, Daedalic was taken over by the French publisher Nacon – for an incredible €53 million. Unfortunately things have only been going so well for the Hamburg team lately.
Further major takeovers occurred during the Corona 'euphoria', such as Astragon Entertainment, which went to the British Team17 plc for €100 million. Since then the landscape has cleared considerably. One can hardly blame the founders for reaping the rewards and handing over responsibility after years, sometimes decades, of difficult development work. In countless conversations I was told how many sleepless nights are spent worrying about follow-up orders and jobs. In any case, there is no lack of potential for setbacks: every unscheduled postponement, every novelty that runs just fine drives up the adrenaline level, flanked by funding hara-kiri.
I therefore regularly command respect when entrepreneurs build a sustainable company, hold the business together even in difficult phases, pay serious salaries in the best case and are often held accountable because their own assets are in the company company is stuck. This applies even more to those who do not retreat to the sun deck, but rather take on responsibility again and again – also with regard to the staff entrusted to them.
To start and survive in this industry, you need eggs made of Valyrian steel (Feel free to use any other metaphor for high risk-taking at this point). An industry that only knows black and white and hardly any shades of gray. Either things are going abnormally well – or they are simply catastrophic.
George Lucas provides the appropriate image: “Alright, I'll try…”said Luke Skywalker. And Master Yoda replied: “No, don’t try. Do it or don't do it. There is no trying.”
Or as the great philosopher Oliver Kahn put it: “Eggs! We need eggs!”
With this in mind, I wish you, your team and your family a sunny Easter weekend and relaxing holidays – enjoy it!
Petra Fröhlich
Editor-in-chief of GamesWirtschaft
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