Hugo Games (OMX: HUGO) is pleased to announce that it has completed the acquisition of Sacramento-based 5th Planet Games – a leading developer of community based social games and one of the best-selling game developers on the Kongregate publisher platform ever.
The final price of the acquisition is $737,000 USD, which is slightly less than the initial estimates. As mentioned in the announcement on September 13th, 2018, Hugo Games will use existing liquidity to buy 5th Planet Games. Because the acquisition is based on already available funds it will not cause any dilution for the existing shareholders.
It will cost an additional $160,000 USD to bring the upcoming sequel to the popular mobile game “Dawn of the Dragons” to market in Q2 2019. This money will also come from already available funds.
Hugo Games has high expectations regarding the upcoming game. One reason is that its precursor grossed revenues of $27.7 million USD. Another reason is that the Hugo Games management has seen the new game and is highly impressed.
5th Planet Games has four games in its current portfolio. The games are “Tap Cat 9 Lives,” “Age of Heroes,” “Curio Quest” and “Dawn of the Dragons.” The present revenue of these titles is $800,000 USD per year, which will now come on top of Hugo Games current revenue.
However, the acquisition is not only based on expectations for the upcoming game and extra revenue. Hugo Games’ CEO Henrik Nielsen emphasizes that the knowhow and talent of the 5th Planet Games team of 15 very experienced full-stack game developers gives the new and combined company a wide array of extremely valuable assets.
“The important point is that the 5th Planet Games crew are experts in the type of mobile games known as community-based games,” says Henrik Nielsen.
“They have proved that they are able to create a high degree of retention and, even more importantly, they are able to monetarize on them and earn money. This basically means that they have the knowhow to maintain their customers and make them deliver a steady income. That’s an important and valuable ability which supplements Hugo Games perfectly.”
The 5th Planet Games founder, Robert Winkler, will continue as Studio Lead of the Sacramento office.