Avista
Video Game Briefing Partners
Highlights:
• Market Cap for all public companies in global game sector is $85.4 billion; a increase of 11% since the December Newsletter
• Over $219m of M&A deals in global sector (Last 30 days)
• Over $19m raised in global sector (Last 30 days)
• Weighted average share prices were down 5% in the last month using the median for PC/Console Game companies
• Weighted average share prices were up 4% in the last month using the median for Online Game companies
Recent M&A Deals
Announced/Initial Filing Total Implied Implied Implied
Date (Including Bids Transaction Enterprise Value Implied Enterprise Enterprise Enterprise
and Letters of Intent) Target/Issuer Value ($mm) Buyers/Investors ($mm) Value/Revenues Value/EBITDA Value/EBIT
Mobile
02/09/2009 Ideaworks - ARM Holdings - - - -
Distribution
02/04/2009 Crave and SVG Distribution 8.1 Fillpoint - - - -
PC, Console Games
02/12/2009 D3 Inc. 80.42 Namco Bandai 62.1 0.4 27.5 -
02/12/2009 Eidos 120.3 Square Enix 83.4 0.5 - -
02/04/2009 Snowblind - Warner Bros - - - -
02/04/2009 Action pants - Ubisoft - - - -
Online Games
02/24/2009 Gastronaut - PopCap Games - - - -
02/10/2009 MMO Cluster (49%) - MMO Life - - - -
02/02/2009 Asiasoft (49%) 0.24 Top Image Systems 0.5
01/29/2009 MyMMOShop 10.0 My MMO 10.0 - - -
Game technology/Middleware
02/17/2009 Vyk Games - Digini - - - -
February 2009 Source: Capital IQ, Company Filings, Brokers & Press 1
Avista
Video Game Briefing Partners
Recent Fundraising Deals
Announced/Initial Filing
Date (Including Bids Total Transaction
and Letters of Intent) Target/Issuer Transaction Type Value ($mm) Investors
Game technology/Middleware
02/18/2009 SC2X Private Placement 1.2 Partners, Naxicap Partners, OTC Asset Management
02/16/2009 Emergent Game Technologies Private Placement 12.5 Hopewell Ventures
Online Games
02/16/2009 Virtual Fairground Private Placement 4.0 -
02/10/2009 My Sapient Private Placement 0.9 NorthStar Equity Investors
02/03/2009 MMO Life BV Private Placement 1.3 Klaas Kersting, Alexander Roesner
01/23/2009 Sauma Technologies Private Placement 0.5 Tekes and Aloitusrahasto Vera Oy
Bankruptcies
Date of filing Company Comments
02/24/2009 Atomic Planet UK independent studio goes under after almost nine years
02/12/2009 Midway Games Midway Games, Inc., have filed Chapter 11 Bankruptcy relating to two classes of debt surrounding the prior sale of
control by billionaire investor Sumner Redstone
01/28/2009 Brighter Minds Media Brighter Minds filed for bankruptcy and is looking at all options for its subsidiary including a possible sale of the
subsidiary
Video Game Events to be attended by Avista Partners for balance of 2009:
GDC in San Francisco, CA on 23-27 March - http://www.gdconf.com/
E3 in Los Angeles, CA on 2-4 June - http://www.e3expo.com/
Gamescom in Cologne, Germany on 19-23 August - http://www.gamescom-cologne.com/
Plus we will be hosting our annual Interactive Entertainment Summit in London in late 2009 which is by invitation only. See details of the event in 2008 at:
http://www.avistapartners.com/news-events.html
February 2009 Source: Capital IQ, Company Filings, Brokers & Press 2
Avista
Video Game Briefing Partners
Game Index Performance by sub-sector (LTM)
The Online Games Index is the best performing game sector index at -32%
130.0
120.0
110.0
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09
Online Game Index Game Retailers Index Mobile Game Index
PC/Console Game Index Game Distributor/Accessory Index S&P 500 Index
Note: the companies making up each index are those listed in the corresponding comps in the following pages. The indexes are based on a weighted market cap and are rebased to 100 at the start.
February 2009 Source: Capital IQ, Company Filings, Brokers & Press 3
Avista
Video Game Briefing Partners
Game Index Performance by region (LTM)
The Asia Game Index is the best performing regional game index at -42%
130.0
120.0
110.0
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09
Asia Game Index North America Game Index Europe Game index S&P 500 Index
February 2009 Source: Capital IQ, Company Filings, Brokers & Press 4
Avista
Video Game Briefing Partners
Stock Comps (by sector & ranked by enterprise value):
Stock Price
(local Price as % Price as Enterprise
EV/Revenue EV/EBITDA P/E Share price movement(1)
currency) of LTM % of LTM Market Cap Value
(2/27/09) High Low (USDm) (USDm) CY 2007 CY 2008 CY 2009 CY 2010 CY 2007 CY 2008 CY 2009 CY 2010 CY 2007 CY 2008 CY 2009 CY 2010 L1M L3M L6M LTM
PC/Console Game Publishers/ Developers
Nintendo Co. Ltd. 28,490.00 44.6% 131.9% 36,938.8 25,664.6 1.61x 1.42x 1.57x 1.36x 5.5x 4.9x 5.3x 4.0x 12.1x 12.3x 11.8x 9.4x -16% -12% 50% -55%
Activision Blizzard, Inc. 9.95 51.6% 122.2% 13,177.7 10,175.7 2.51x 2.42x 2.01x 1.90x 18.2x 96.9x 10.0x NA 21.6x 19.1x 14.9x NA 1% -14% NA NA
Electronic Arts Inc. 16.13 29.4% 113.3% 5,191.0 2,930.0 0.93x 0.70x 0.63x 0.61x NM 6.7x 4.0x 3.6x NM 29.0x 11.5x 8.4x -5% -22% 34% -66%
Konami Corp. 1,402.00 31.8% 110.0% 1,953.9 1,946.6 0.66x 0.62x 0.63x 0.72x 4.6x 4.1x 4.2x 4.9x 11.4x 10.2x 9.9x 12.7x -24% -32% 41% -62%
Sega Sammy Holdings Inc.