Monday, June 19, 2023, Bengaluru, India
While the U.K. and U.S. work to prevent Microsoft’s acquisition of Activision due to worries that it will kill competition in game distribution, competition in another (smaller) area of gaming, modding, and analytics, looks to be alive and well.
Professor is a well-known League of Legends companion software that helps players measure and improve their playing data. Wargraphs, a one-man startup, will be bought for up to €50 million ($54 million), with half of the price paid upfront and the other half contingent upon achieving specific revenue and growth targets.
MOBA Networks, a Swedish firm that acquires, develops, and manages online gaming communities (MOBA is an acronym for “multiplayer online battle arena”), is purchasing the startup and its current offerings. The idea is to make them available in other areas, especially those in Asia, and to develop analytics for more titles.
Although Wargraphs currently also develops analytics for Teamfight Tactics and Legends of Runeterra, its League of Legends company has been by far the most successful. Professor was founded on Overwolf, where its app has amassed 10 million downloads, and when you combine traffic from that platform and its direct website, you have more than 1.25 million daily active users. With revenues of €12.3 million in its most recent fiscal year, the company, such as it is, has been around for around ten years and has essentially always been profitable.
The acquisition highlights an intriguing trend in the startup landscape today. In the past ten years, which have been particularly bullish, startups have raised enormous sums of money at eye-popping valuations, sometimes (okay, let’s be honest, OFTEN) without having much in the way of revenues or strong business models to support them, and occasionally even without having genuine products to their names.
The gaming sector is a significant one today. The planned $68.7 billion acquisition of Activision by Microsoft would be the biggest deal ever made in the technology sector as a whole, not just the gaming sector.
However, companies like MOBA, Overwolf, and Wargraphs are examples of how that’s changing: Games are at the centre of larger ecosystems of goods and services that have the potential to become significant areas of value in and of themselves, even if they aren’t the blockbusters at the core of those ecosystems.
Beyond that, I predict that new gaming chapters—thanks to innovative interactive headsets like the Vision Pro and developments in fields like generative AI—will pave the way for even greater ecosystem development.
With that said, Jean-Nicholas is aware of the project he wants to work on next: “a game,” he told me. Specifically, a card game that, coincidentally, will rival Activision Blizzard’s Hearthstone. He won’t be seeking outside funding for this, although he may bring on one or two staff members.