Video games developer reveals £75m spending spree

Video games developer Team17 has acquired two companies in deals worth up to £75m after completing a year when it exceeded its own heightened expectations.

The group had a transformational 2020, as Covid-19 lockdowns resulted in much higher spending on computer games.

It has today revealed its sales and profits for 2021 will be ahead of its expectations and ahead of 2020 levels.

Team17, which has bases in Wakefield, Nottingham and Manchester, also announced it has acquired both the game title Hell Let Loose (HLL) and independent games publisher The Label.

HLL was created by developer Black Matter and allows players to fight in iconic battles of the Western and Eastern Fronts of the Second World War.

Team17 will pay £31m for HLL with a potential earn-out of up to £15m.

It has also agreed to pay an initial £18m for San Francisco-based The Label, with up to £12m to follow over the next three years.

The Label is a launch partner to both Apple and Google subscription gaming services, and is considered a pioneer within the subscription games market.

Michael Pattison, CEO at Team17 Games Label, said: “Hell Let Loose has quickly become a highly credible and innovative multiplayer tactical first-person shooter supported by a very passionate and highly engaged community with over six million players.

“Having built a close and extremely productive relationship with Black Matter already, we believe that by bringing Hell Let Loose into the Team17 stable, we can serve and build upon the needs of an ever-growing community, improve and expand upon the existing player experience and develop new ways to entertain and delight.

“This acquisition represents an important next step in our strategy to expand our ownership of IP that is not only of the highest quality, but importantly has long-term growth potential.”

HLL is an existing Team17 Games Label third-party title, and as a result of the acquisition will become part of the label’s first party portfolio.

The deal supports Team17 to further expand its owned IP and franchise footprint.

It will enable Team17 to create additional opportunities to extend the lifecycle of the existing game, including further downloadable content and ongoing support as well as exploring potential sequels and other commercial opportunities for the HLL IP to drive the longer-term growth and value of the HLL franchise.

Team17 adds that its purchase of The Label represents an exciting opportunity to significantly expand its market reach and knowledge across the mobile and subscription games arena – a market which is projected to exceed $11bn per annum by the end of 2025.

Supported by the wider Team17 Group structure, the acquisition will join Team17’s existing Games Label to provide a mobile subscription arm and collectively work with joint strategic partners to pursue the Games Label’s ambitious growth objectives.

Team17 says it will also look to harness The Label’s mobile gaming expertise to develop and further capitalise on the Group’s existing IP, broadening the overall scope of its digital entertainment operations.

Pattison added: “The Label is a fantastic addition to the Team17 family, creating an indie game powerhouse across PC, console and mobile platforms.

“We look forward to helping them build on their impressive track record of success, further enabling them to scale even greater heights in support of our ambitious growth aspirations.”

Join us at the 2022 Rainmaker Awards