Nazara Technologies to take 100% ownership of Nextwave Multimedia

The first tranche will include buying 1,000 shares, representing 3 percent stake of Nextwave Multimedia, for Rs 2.3 crore in cash. The second tranche will include buying 8,375 shares, representing 25.12 percent stake of Nextwave Multimedia, for Rs 19.33 crore either by cash or stock issuance of Nazara Technologies within six months of the closure of the first tranche.

Post completion of the transaction, the country's first publicly listed gaming firm said it will consider merging the entity and/or its IP into the parent company Nazara Technologies Ltd.

Nazara said it would consider deploying a similar playbook for other existing games as well as new acquisitions, whereby those core gaming IPs would be merged into the parent listed entity to "extract synergies and capture cash flows directly at the parent level"

Mittersain has previously told Moneycontrol that the firm is ramping up its investments and acquisitions as well as looking at bigger deals to scale up its revenue in the coming years. In March, Nazara Technologies earmarked a $100-million war chest for mergers and acquisitions over the next 24 months.

Revamping Nextwave Multimedia

Founded in 1995, Nextwave Multimedia is the developer of the World Cricket Championship (WCC) franchise, which claims to be the largest mobile-based cricket simulation game.

Last year, Nazara said it has roped in industry veteran Christopher Franklin as CEO last year. Franklin took over from Nextwave Multimedia founder Rajendran who became the gaming studio's board chairman.

"Over the last year the former CEO / founder has helped with a smooth transition of the knowledge and expertise associated with the WCC franchise" Nazara said on May 25.

The firm mentioned that Nextwave Multimedia’s ad monetization, live ops, brand sales, and user acquisition operations were revamped in the past year and it expects these measures drive better retention and monetization for the core WCC franchise in FY25.

Nextwave Multimedia predominantly focuses on developing casual and multiplayer mobile games in the sports genre. The firm claims that WCC titles have clocked over 100 million downloads across mobile platforms in the past seven years.

These games are played by around 8.1 million monthly active users as of Q4-FY24, with India accounting for the majority of the users. Of this, about 1.1 million people were daily active users for the quarter, Nazara said on May 25.

The company said it will leverage the studio's skills to further expand the WCC franchise across platforms as well as launch new games, with the first game expected to launch within Q1-FY25.

Last month, Nextwave Multimedia also bought all the intellectual property rights related to "UTP - Ultimate Teen Patti", a casual freemium card game from U Games, a subsidiary of skill gaming unicorn Games24x7.

The studio had a turnover of Rs 21.9 crore in FY24 as compared to Rs 23.8 crore in FY23 and Rs 19.2 crore in FY22.

New investments

Nazara Technologies said it has also received board approval to invest in gaming-focused global VC firms Play Ventures and F4 Fund.

The company plans to invest upto to Rs 16.6 crore ($2 million) in Play Ventures' third fund and upto Rs 2.1 crore ($250,000) in F4 Fund's maiden fund over the next 3-4 years.

Singapore-based Play Ventures is an early-stage VC firm started by former gaming entrepreneurs Henric Suuronen and Harri Manninen in 2018. The fund has invested in over 100 gaming studios, content, tooling and service companies until now.

Among its India portfolio companies include skill gaming unicorn Mobile Premier League (MPL) and sports gaming studio All Star Games.

F4 Fund is a US-based early-stage VC firm started by gaming entrepreneurs-turned-investors David Kaye and Joakim Achren in 2023. The $10 million fund invests in ventures started by founders from a video gaming background in the areas of artificial intelligence (AI), Software-as-a-Service (SaaS), social and consumer technology.

Nazara Technologies has earlier backed gaming funds such as Griffin Gaming Partners and Bitkraft Ventures in 2022.

In an interview with Moneycontrol earlier this week, Mittersain had said that they intend to invest in more VC firms in the future

"Our investments in gaming funds are working out quite well for us. We are interacting a lot and getting a good knowledge pool on what's going on in the market, and also, they keep passing us opportunities" Mittersain said.

Besides VC firms, Nazara Technologies has also received board approval to invest upto Rs 2.1 crore ($250,000) in Pixode, a casual gaming studio with offices in Israel, Ukraine and the United Kingdom.

Pixode has developed two games until now - SoliTown (a Solitaire game with puzzle-inspired gameplay) and Soul Battles (puzzle game with multiplayer features).

These investment comes on the back of Nazara raising Rs 760 crore from marquee investors such as Zerodha co-founder Nikhil Kamath, ICICI Prudential MF, and SBI Mutual Fund. Along with its subsidiaries, Nazara said it has raised Rs 950 crore in FY24.

Nazara Technologies currently operates in three key sectors - gaming (World Cricket Championship, Kiddopia, Animal Jam, Classic Rummy etc), esports (Nodwin Gaming, Sportskeeda) and advertising (Datawrkz).

The firm reported a revenue of Rs 1,138 crore in FY24, a 4.3 percent increase from Rs 1,091 crore revenue in FY23.

Net profit was at Rs 74.75 crore for FY24, up 21.8 percent from Rs 61.4 crore in FY23. The profit from its continuing operations increased by 41.2 percent to Rs 89.5 crore in FY24, as against Rs 63.4 crore in FY23.