UTV Software Communications has acquired controlling stakes in two gaming companies Indiagames and the UK-based Ignition Entertainment.
The media and entertainment company has acquired 51 percent stake in Indiagames for Rs 68 crore, while it acquired 70 percent stake in Ignition Entertainment for Rs 60 crore.
Confirming the development, UTV CEO Ronnie Screwvala said, "This acquisition is in synergy with our existing businesses. This will also strengthen our presence in the fourth vertical the new media."
At present, UTV has presence in four verticals TV, movies, broadcast and new media and these acquistions would further strengthen its global presence in animation and gaming industries that fall under new media.
UTV will also invest Rs 135 crore to enhance its existence in the animation movies segment in the next 3 years.
Of the total acquisition amount of Rs 128 crore, about Rs 60 crore will be used to buy shareholders' stake, while the balance would be used for the acquired companies' growth.
Indiagames is a leading gaming company with a market share of 40 to 60 percent, according to CEO of Indiagames, Vishal Gondal. "With the UTV-Indiagames association, we are focused on improving our international hold," said Vishal.
He further added that the company will develop novel games from its existing content catalogue to be marketed globally.
The move was welcomed by the industry, with Mauj Telecom CEO Arun Gupta saying, "Both UTV and Indiagames are big players and their coming together excites the animation and gaming industry."
According to Hungama CEO Neeraj Roy, "With the industry growing, more of such strategic alliances could be expected."
However, a source from the industry said, "The alliance is a steal, an act of desperation because the property has been undermined."
The software gaming industry comprising consoles, PCs, online and mobile gaming is estimated to be around $29.5 billion. The industry is expected to grow by 11.4 percent per annum.
"With mobile gaming being one of the fastest growing sectors and console gaming being a big component of the industry, we are expecting revenue between Rs 375-400 crore in the next 3 years from animation and gaming sectors," said Screwvala.
