Video Game Briefing
May 2010
Avista
Video Game Briefing Partners
Table of Contents
Last 30 Days Review:
Highlights
Recent Fundraising Deals
Recent M&A Deals
Game Index Performance by sub-sector (LTM)
Game Index Performance by region (LTM)
Online Game/ Virtual World Universe
Stock Comps (by sector & ranked by enterprise value):
PC/ Console Game Publishers/ Developers
Game Distributors/ Accessory Companies
Game Outsourcing Companies
Payment Companies
Mobile Game Companies
Online Game Companies
M&A Comps (LTM & ranked by date):
Mobile Game M&A Comps
Game Distribution/ Accessory M&A Comps
Game Technology/ Middleware M&A Comps
Game Outsourcing M&A Comps
Payment M&A Comps
PC/ Console Game M&A Comps
Online Game M&A Comps
Fundraising Comps (LTM & ranked by funding amount):
PC/ Console Game Fundraising Comps
Payment/ Offer/ Analytics Fundraising Comps
Mobile Game Fundraising Comps
Game Hardware Fundraising Comps
Game Technology/ Middleware Fundraising Comps
Online Game Fundraising Comps
Key Developments in the game sector (global to 30 May 2010)
May 2010 Source: Capital IQ, Company Filings, Brokers & Press 2
Avista
Video Game Briefing Partners
About Avista Partners LLP
Avista Partners is an independent investment banking firm that brings deep sector expertise, global relationships, and world class transaction experience in the digital
media and luxury sectors. Our global network is based on strong relationships with senior management at companies and media investors in our core sectors including
venture capitalists, private equity firms, hedge funds, family offices & institutional investors. We provide our clients with the following services: Capital Markets Advisory;
Mergers & Acquisitions; Restructuring; and Financial & Strategic Advisory.
This note has been prepared and issued by Avista Partners LLP which is authorized and regulated by the FSA. Any information in this note is based on data obtained from sources considered to be reliable, but no representations or
guarantees are made by Avista Partners with regard to the accuracy of the data. This note is for information purposes, it is not intended to be and should not be construed as an offer or solicitation to acquire, or dispose of, any of the
securities mentioned in this note. This note is intended solely for distribution to professional and business contacts of Avista Partners. It is not intended to be distributed to private investors or private customers. Avista Partners accepts
no responsibility or liability whatsoever for any expense, loss or damages arising out of or in any way connected with the use of all or any part of this report. No part of this material may be (i) copied, photocopied or duplicated in any
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Contact Information:
Tel: +44 207 193 6780
Fax: +44 207 691 7112
Email: info@avistapartners.com
8 Grafton Street
London W1S 4EL
United Kingdom
www.avistapartners.com
May 2010 Source: Capital IQ, Company Filings, Brokers & Press 3
Avista
Video Game Briefing Partners
Last 30 Days Review
Highlights:
• Market Cap for all public companies in global game sector is $109.6 billion
• Over $127m of M&A deals in global sector (Last 30 days)
• Over $71m raised in global sector (Last 30 days)
• The Mobile Game Index is the best performing game sector index at +121.8% (LTM)
• The Asia Game Index is the best performing regional game index at +1.7% (LTM)
• Online Game/ Virtual World Universe has 260+ companies generating over $13.4 billion in annual revenue plus we are tracking 350+ additional new companies
Recent Fundraising Deals
Total
Transaction
Date Target/Issuer Transaction Type Value ($mm) Investors Location
Online Games
05/20/2010 Young Internet GmbH Private Placement - Rocket Internet and Holtzbrinck Ventures Germany
05/19/2010 KTM Advance Private Placement 2.5 CM-CIC Capital Privé France
05/18/2010 Titan Gaming Private Placement 1.0 SAM Venture Partners, Tomorrow Ventures and angel investors USA
05/18/2010 Innogames Private Placement - Fidelity Growth Partners Germany
05/13/2010 Eutechnyx Private Placement 8.9 Prime Technology Ventures UK
05/12/2010 Inquisitive Minds Private Placement 2.6 Harrison Metal Capital USA
05/10/2010 Woozworld Private Placement 3.0 iNovia Capital and ID Capital Canada
05/07/2010 Gamehi Private Bond Sale 6.1 - Korea
Mobile Games
05/26/2010 Ogmento Private Placement 3.5 Chart Venture Partners, CNF Investments and angel investors USA
05/17/2010 Booyah Private Placement 20.0 Accel Partners, Kleiner Perkins Caufield & Byers and DAG Ventures USA
Payment
05/27/2010 Boku Private Placement - Andreessen Horowitz USA
PC/ Console Games
05/20/2010 Red Redemption Private Placement 1.2 Angel Investors UK
05/19/2010 CyberPlanet Interactive Public Co. IPO 3.0 - Thailand
Game Technology
05/24/2010 Gaikai Private Placement 10.0 Rustic Canyon Partners, Benchmark Capital and Triplepoint Capital USA
05/17/2010 Turiya Media Private Placement - Firstmark Capital USA
05/13/2010 OnLive Inc. (2.6%) Private Placement - BT USA
05/10/2010 Sifteo Private Placement 9.0 Foundry Group and True Ventures USA
May 2010 Source: Capital IQ, Company Filings, Brokers & Press 4
Avista
Video Game Briefing Partners
Recent M&A Deals
Total Implied Implied Implied
Transaction Enterprise Implied Enterprise Enterprise Enterprise
Date Target/Issuer Value ($mm) Buyers/Investors Value ($mm) Value/Revenues Value/EBITDA Value/EBIT
PC, Console Games
05/07/2010 Slitherine Software - Matrix Games - - - -
Online Games
05/27/2010 Gamehi (29.3%) 59.8 Nexon 204.1 6.0x - 21.0x
05/27/2010 Infocomm Asia Holdings (52%) 23.0 Gigamedia 44.2 4.9x - -
05/20/2010 XPD Media - Zynga - - - -
05/20/2010 Cyber Revolutionary Space Co. 10.7 NEOWIZ Games Corporation 21.8 - - -
(48.94%)
05/18/2010 Acclaim Games - Playdom - - - -
05/18/2010 Runic Games (increase to majority 8.4 Perfect World - - - -
05/17/2010 Perfect Storm Network Technology 8.8 Dokomo Network Technology - - - -
05/14/2010 Stunlock Studios (minority stake) - Funcom - - - -
05/11/2010 Nextplay (65%) - NCSoft - - - -
05/04/2010 Ndoors (67%) - Nexon - - - -
Payment/ Offer Companies
05/05/2010 fatfoogoo 10.0 Digital River 12.4 - - -
Mobile Games
05/12/2010 Stumptown Game Machine - ngmoco - - - -
05/05/2010 Hands-On Mobile (Hombre Division) - GoTV Networks - - - -
Game Technology
05/05/2010 Tag Networks - ActiveVideo Networks - - - -
Game Hardware
05/13/2010 3DiJoy Corporation (24%) 6.0 China Digital TV Holding Co. 25.0 - - -
May 2010 Source: Capital IQ, Company Filings, Brokers & Press 5
Avista
Video Game Briefing Partners
Key developments in Game Sector (global to 30 May 2010):
Date Com pany Nam e(s) Key Developm ent Headline
May-28-2010 Blizzard Entertainment, Inc. Blizzard Entertainment, Inc. to Set Up Office in Singapore
May-28-2010 Kingsoft Corporation Limited (SEHK:3888) Kingsoft Corporation Limited announces an Equity Buyback
May-28-2010 Square Enix, Inc. Square Enix, Inc. Enters the iPad App Market
May-28-2010 NetDragon WebSoft, Inc. (SEHK:777) NetDragon WebSoft, Inc. announces an Equity Buyback
May-27-2010 Webzen Inc. (KOSE:A069080) Webzen Inc., Special/Extraordinary Shareholders Meetings, May 27, 2010
May-27-2010 Playlogic Entertainment Inc. Playlogic Entertainment Inc. w ill Change its Ticker to PLGCE from PLGC
May-27-2010 The9 Limited (NasdaqGS:NCTY) The9 Extends S.U.N Authorization Contract w ith Webzen
May-27-2010 Riot Games, Inc.; TransGaming, Inc. Riot Games, Inc. Working w ith TransGaming, Inc. to Launch League of Legends for Mac
May-27-2010 Activision Publishing, Inc. Activision Publishing, Inc. Announces the Release of Crash Bandicoot(R) Nitro Kart 2
May-27-2010 CD Projekt Sp. Z.O.O. CD Projekt To Reportedly Sell Czech And Hungarian Subsidiaries
May-26-2010 Zoo Entertainment, Inc. (OTCBB:ZOOE.D) Zoo Entertainment, Inc. Launches indiePub Games
May-26-2010 THQ Inc. (NasdaqGS:THQI) THQ Inc. Announces Launch of THQ Partners
May-26-2010 Sony Computer Entertainment America, Inc. Sony Triumphs in Copyright Battle over "God of War"
May-26-2010 Electronic Arts Inc. (NasdaqGS:ERTS) Electronic Arts Inc. to Open Customer Service Center in Galw ay, Ireland
May-25-2010 Kingsoft Corporation Limited (SEHK:3888) Kingsoft Corporation Limited, Q1 2010 Earnings Call, May-25-2010
May-25-2010 Webzen Inc. (KOSE:A069080) Webzen Inc. Plans to Introduce New Archlord Server
May-25-2010 Activision Publishing, Inc. Activision Publishing, Inc. Announces Availability of Blur at Retail Outlets Nationw ide
May-25-2010 Shanda Games Limited (NasdaqGS:GAME) Shanda Games Limited Provides Revenue Guidance for the Year of 2010
May-25-2010 Disney Interactive Studios, Inc. Disney Interactive Studios, Inc. Introduces Highly Anticipated, Action-Packed Video Game
May-25-2010 Atari (ENXTPA:ATA) Atari Reports Consolidated Earnings Results for the Second Half and Full Year Ended March 31, 2010
May-25-2010 Electronic Arts Inc. (NasdaqGS:ERTS) Insomniac Games Selects Electronic Arts Inc. for New Publishing Agreement
May-25-2010 Sony Computer Entertainment America, Inc. Sony Computer Entertainment America, Inc. Announces Release of ModnNtion Racers
May-25-2010 PopCap Games, Inc. PopCap Games, Inc. Appoints Steve Raymund as Director
May-25-2010 Shanda Games Limited (NasdaqGS:GAME) Shanda Games Mulls Acquisitions
May-25-2010 Webzen Inc. (KOSE:A069080) The9 Limited Announces Renew al of SUN License
May-25-2010 THQ Inc. (NasdaqGS:THQI); Zuffa, LLC THQ Inc. and Zuffa, LLC Release UFC(R) Undisputed(TM) 2010
May-24-2010 Kingsoft Corporation Limited (SEHK:3888) Kingsoft Corporation Limited Reports Unaudited Consolidated Earnings Results for Q1
May-24-2010 BigBen Interactive (ENXTPA:BIG) BigBen Interactive Reports Audited Consolidated Earnings Results for the Full Year Ended March 31, 2010
May-24-2010 CyberPlanet Interactive Public Co., Ltd. Reports Consolidated and Parent Earnings Results for the First Quarter Ended March 31, 2010
May-24-2010 Majesco Entertainment Co. Majesco Entertainment Co. Announces 'Babysitting Mama' for Wii
May-21-2010 Funcom N.V. (OB:FUNCOM) Funcom N.V. Reports Preliminary Unaudited Earnings Results for the First Quarter Ended March 31, 2010
May-21-2010 Midw ay Games Inc. Liquidation Plan Approved for Midw ay Games Inc.
May-20-2010 Ubisoft Entertainment SA (ENXTPA:UBI) Ubisoft Entertainment SA Reports Earnings Results for the Full Year Ended March 2010
May-20-2010 Glu Mobile, Inc. (NasdaqGM:GLUU) Glu to Release Next Game for Call of Duty(R) Franchise on Mobile Phones Worldw ide
May-20-2010 Amico Games Corp. Amico Games Corp. Plans to Upgrade its In-Game Graphics in Journey to the West Online
May-20-2010 SouthPeak Interactive Corp. SouthPeak Launches 3D Dot Game Heroes in Europe
May-20-2010 Mochi Media, Inc. Mochi Media Launches Mobile Flash Games Website Using Adobe Flash Player 10.1
May-20-2010 THQ Inc. (NasdaqGS:THQI) THQ Inc. Announces Truth or Lies Unique New Party Game
May-20-2010 Webzen Inc. (KOSE:A069080) Webzen Inc. Proposes Amendments to its Articles of Incorporation
May 2010 Source: Capital IQ, Company Filings, Brokers & Press 6
Avista
Video Game Briefing Partners
Game Index Performance by sub-sector (LTM)
The Mobile Game Index is the best performing game sector index at +121.8%
220
200
180
160
140
120
100
80
60
Jun/09 Jul/09 Aug/09 Sep/09 Oct/09 Nov/09 Dec/09 Jan/10 Feb/10 Mar/10 Apr/10 May/10
S&P 500 Index Game Distributor/ Accessory Index
Game Retailer Index Mobile Game Index
Game Outsourcing Index PC/ Console Game Index
Payment Index Online Game 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.
May 2010 Source: Capital IQ, Company Filings, Brokers & Press 7
Avista
Video Game Briefing Partners
Game Index Performance by region (LTM)
The Asia Game Index is the best performing regional game index at +1.7%
130
120
110
100
90
80
70
60
50
Jun/09 Jul/09 Aug/09 Sep/09 Oct/09 Nov/09 Dec/09 Jan/10 Feb/10 Mar/10 Apr/10 May/10
S&P 500 Index Europe Game Index
North America Game Index Asia Game 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.
May 2010 Source: Capital IQ, Company Filings, Brokers & Press 8
Avista
Video Game Briefing Partners
Mail.ru Games
Webzen
Realnetworks Games Tencent Games
Online Game/ Virtual
Viacom Online
World Universe has YoyogamesKongregate AOL Games Wild Tangent
260+ plus companies Zapak Spil Games
EA Online
with $13.4 billion+ in King.com
Miniclip iwin
Playfirst
Yahoo Games
Ourgame Duowan
Gungho
Duniu GGL
annual revenue 6 waves
Roblox Games2win Cafe.com Ganymede
Most Diverse Feerik Big Fish Oberon Shanda Games
Alawar Microsoft Online
Fettspielen MLG
51wan
9you Gala-net
GameDuell Geewa Motion Twin Popcap Aeria Run Up Mgame
Gamania
Zynga Jagex
Moli Group Netease Games
Acclaim
Bigpoint Sony Online (SOE) NcSoft
Level Up Games
rockyou
Many Players Gameforge CJ Internet
Viwawa Playdom Sky Union Liveplex
Vector Gamepot
Macrowell
Prizee Redmoon Gamigo Hanbitsoft
Portfolio Diversity Gigamedia Games
The9
Cubinet ESL
Vinagame Netdragon
Guangyu Huaxia
Weeworld
Sing-Gium Softstar Chinese Gamer Gameon
Lizard CIB Net Station
Nexon
Snail Game GameCyber WeMade Entertainment Perfect World
Upjers Neowiz Games
Sonokong Roc Works
SGN Gonzo Rosso
IP e-games IGS Online Games DMII
High5 Asiasoft
Burda Interactive China Cyber Port
Userjoy Windysoft CDC Games
Slide M-Etel Mycnx Linekong SZ Network Actoz Kingsoft Games
Goorm GoodGame VTC Game Ferry Game
Headlock
Aruon First
K2/ GamersOutspark
Lyto Gravity Garena Valve Online
Anipark Joymax Goa
OnNet X-legend Innogames Artix Warner Bros. Online Games
Beemoov Ongame Weilai Barunson
Ini3 JC Entertainment Cubizone GamesCampus
Five Minutes Ndoors
Gameus Shiji Tiancheng Gamehi Travian Giant Interactive
Crowdstar Flowplay L&K
Unalis Storm Entertainment Logic Korea C&C Media
Ankama CyberstepImperia OnlineMygame.ph Dragonfly Ogplanet Games Masters
Owlient GCREST Subagames
Jumpstart Frogster
Three Rings Kog Studios Ntreev Object
CITVC Netempire IAHGames Redduck Software
100sea
Exagame Apaja Wiseon EYA Interactive Dream Execution Gamasoft
Northstar Imazic Ymir Galaxy Gate
Hive7 Lager Network G10 Codemasters Online
Barunson Interactive Softnyx InixsoftH-win
Extralives Cipsoft Gamelabs Hi-win
Min Communications Aramaru Taewool Dreamwork Power Challenge NetTimeSoft
CaveCrspace Blizzard
Sulake Young Internet Expotato Digitalic Nowcom Games
Gaia Online Mediasite Gameart Studio Allm CCR F4 YedangOnline
Watagame Radiance YNK Korea
Entropia G-Bits
Urban Rivals IMVU Cedar Online Digipark Ice Entertainment Gnisoft Maiet
Apeha.ru Indy21 Entwell ESTsoft games Funcom
Stardoll Seedc Wisecat Changyou (Sohu)
Tri-d Second Life Wizard101 Alt1 CCP
Atoonz Zwinky Rhaon On Soft Fusion Fall Softon IMC Games
Combats.ru Ons
Cartoon Doll Emporium Mind Candy eRepublik
Club Penguin Webkinz
Least Diverse
Casual Casual to Hardcore Focus Hardcore
May 2010 Source: Capital IQ, Company Filings, Brokers & Press 9
Avista
Video Game Briefing Partners
Stock Comps (by sector & ranked by enterprise value):
Stock Price Price as % Price as Market Enterprise EV/Revenue EV/EBITDA P/E
(local currency) of LTM % of LTM Cap Value
(5/31/10) High Low (USDm) (USDm) CY 2008 CY 2009E CY 2010E CY 2011E CY 2008 CY 2009E CY 2010E CY 2011E CY 2008 CY 2009E CY 2010E CY 2011E
PC/Console Game Pu