Recently, Improbable, a trailblazer in the metaverse field, parted ways with one of its crucial gaming divisions, The Multiplayer Group (MPG). This division was sold off to Keywords Studios for a whopping £76.5 million (around $97.1 million). This move comes as a bit of a shock, especially since both the metaverse and web3 realms have been facing some tough times lately.
Keywords Studios, a company best known for its work developing games for other developers, has now strengthened its stance in the gaming world with this acquisition.
Keywords Studios Acquires MPG Amid Financial Changes
Interestingly, this deal with Improbable occurred during a period of financial turbulence for Keywords Studios. Although the company had set aside a hefty €91.9 million (about $100 million) for acquiring new businesses, its shares took a significant hit, dropping nearly 49% since the beginning of the year.
This aggressive expansion approach has led Keywords Studios to switch from having net cash to being in net debt, which stood at €11.4 million as of the end of June 2023.
Herman Narula, the co-founder and CEO of Improbable, mentioned that selling MPG fits perfectly with their strategy of being a ‘venture builder.’ Narula shared, “We thought, understanding multiplayer gaming and metaverses gives us a unique perspective. It could help us identify opportunities where we can really excel.”
Part of this strategy also includes investing in or acquiring teams that are focused on gaming and metaverse projects, especially those that have room for growth or could be spun off into separate entities.
Is the Future of Metaverse and Web3 Gaming Uncertain?
Improbable’s decision to let go of MPG seems to reflect a larger trend impacting the metaverse and web3 gaming industries. Recent studies have shown that the web3 gaming market is quite unstable. A staggering 75.5% of the 2,817 web3 games launched between 2018 and 2023 did not take off. This highlights the unpredictability and the challenges faced in this emerging market.
Despite these challenges, the metaverse sector continues to grow and evolve. The strategies adopted by companies like Improbable and Keywords Studios might very well shape the future of gaming and virtual experiences.
In conclusion, while the metaverse and decentralized web have immense potential, it’s clear that their most effective applications and associated products will need some time to fully develop and mature.