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Comcast Bids to buy Gaming Companies (Nexon bid confirmed publicly)

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zg44

Jun 5, 2017
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Amazon, Comcast, Electronic Arts submit bids for Nexon holding firm: Maeil report | Reuters

As per Reuters, Comcast has formally joined the bidding stakes for Korea's Nexon which produces PC and Mobile games. Other bidders include Amazon, EA, Tencent, and various other Asian gaming companies.

Nexon's founder (owning 98.64% of the voting stock) has put it up to bid at an expected value of around $9 billion.

Their main revenue games are some combination of:

China: Dungeon&Fighter

Korea: Maple Story and various EA Sports games like FIFA brand

North America/Europe: Maple Story M, Darkness Rises, AxE



Will be worth following though I expect Tencent or EA to win this bidding war. I'm not sure how fully Comcast is ready to go into gaming, though $9 billion for Nexon would be a big statement that they want to try to get into the industry.

Given Comcast's total debt post-Sky purchase, I expect this to be around the largest target that they would aim for in the gaming industry; I doubt we see any kind of targets of the Nintendo/Activision-Blizzard/EA size... for at least the next 3-4 years while they bring down overall debt.

A purchase under <$10-12 billion though is very easily "digestible".
 
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JungleSkip said:
Looking at this studios output...I have no idea how they can be worth all that much money.
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Chinese mobile gaming is big bucks these days; I think over 50% of Nexon's revenue comes from China and most of that from Dungeon&Fighter.

It's a bit problematic though to be investing $9-10 billion into a publisher who claims most of their revenue/profit from a single mobile game in China. Trends can change very quick in mobile gaming, especially in China.

I'd assume Comcast is not as interested here as some of the other bidders like Tencent and EA. Tencent is the Chinese distributor for that game and EA has its relationship with Nexon to release their games in Korea. Those are the 2 most obvious winners here.

Amazon is probably the biggest dark horse outside those 2 given their virtually unlimited pockets.
 
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zg44 said:
Chinese mobile gaming is big bucks these days; I think over 50% of Nexon's revenue comes from China and most of that from Dungeon&Fighter.

It's a bit problematic though to be investing $9-10 billion into a publisher who claims most of their revenue/profit from a single mobile game in China. Trends can change very quick in mobile gaming, especially in China.

I'd assume Comcast is not as interested here as some of the other bidders like Tencent and EA. Tencent is the Chinese distributor for that game and EA has its relationship with Nexon to release their games in Korea. Those are the 2 most obvious winners here.

Amazon is probably the biggest dark horse outside those 2 given their virtually unlimited pockets.
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Comcast has been looking into getting into gaming for the past two years and this is the first sign of them moving forward. Essentially a game company allows the company new IP creation which is becoming essential in the long term as we observe more large scale M&A.
Comcast potentially looking to buy gaming company | Inside Universal Forums
NBCUniversal to get into Esport game creation | Inside Universal Forums

I also believe they are taking this extremely serious.

I will argue this is a great buy based on my personal knowledge of East Asia. You ride the subway in Korea, everyone is playing mobile games from Fortnite, PUBG, League of Legends, etc. Computer gaming is huge in China. Having a company that specializes in those two will allow Comcast to enter and introduce IPs to an audience who isn't focused on watching Netflix and tv shows and movies all day.
 
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quinnmac000 said:
Comcast has been looking into getting into gaming for the past two years and this is the first sign of them moving forward. Essentially a game company allows the company new IP creation which is becoming essential in the long term as we observe more large scale M&A.
Comcast potentially looking to buy gaming company | Inside Universal Forums
NBCUniversal to get into Esport game creation | Inside Universal Forums

I also believe they are taking this extremely serious.

I will argue this is a great buy based on my personal knowledge of East Asia. You ride the subway in Korea, everyone is playing mobile games from Fortnite, PUBG, League of Legends, etc. Computer gaming is huge in China. Having a company that specializes in those two will allow Comcast to enter and introduce IPs to an audience who isn't focused on watching Netflix and tv shows and movies all day.
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Yeah, I just think Nexon is a really tightly focused company. It'd probably be better for Comcast to join with EA and have EA purchase Nexon with Comcast contributing $6-8 billion in cash in exchange for a 15-19% stake in the combined EA/Nexon.

That'd give Comcast an investment in a much broader global gaming company as opposed to control of just Nexon with its heavy reliance on Chinese mobile games.


And then later on after bringing down debt/earnings ratio, Comcast can maybe look at taking over the remainder of EA/Nexon.
 
zg44 said:
Yeah, I just think Nexon is a really tightly focused company. It'd probably be better for Comcast to join with EA and have EA purchase Nexon with Comcast contributing $6-8 billion in cash in exchange for a 15-19% stake in the combined EA/Nexon.

That'd give Comcast an investment in a much broader global gaming company as opposed to control of just Nexon with its heavy reliance on Chinese mobile games.

And then later on after bringing down debt/earnings ratio, Comcast can maybe look at taking over the remainder of EA/Nexon.
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I would have to know more about their goals overall. I would actually prefer Comcast to become a minor owner in Nintendo, increasing investment into Cygames and Niantic, and gain ownership of Level 5. But I think this still is a good first step.
 
quinnmac000 said:
I would have to know more about their goals overall. I would actually prefer Comcast to become a minor owner in Nintendo, increasing investment into Cygames and Niantic, and gain ownership of Level 5. But I think this still is a good first step.
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Yeah, Nintendo is probably by far the #1 IP gaming co out there, and the tie-ins between Universal Studios-Nintendo and Universal Parks-Nintendo are already there.

Of course, Nintendo's probably not going to be for sale any time soon, but that's always been the #1 option.
 
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Brian Robert, CEO of Comcast, son is in charge of Comcast's esport division and signed a joint esports deal with SKT Telecom, one of the big three cell services here in Korea.

What better way to get into esports more than a software developer who makes computer games as well. Additionally add in the fact its a joint venture with one of South Korea's biggest company, they make a game that goes big on the market than bam!

Even the Koreans are realizing the worth of the holdings...
The Korean bidders are arguing that they are better bidders as Nexon is an important national asset of South Korea (while Nexon’s headquarters is in Tokyo, most of its developers are in South Korea).

“I am not an expert in Korean law and certainly the Koreans often treat gaming as a “god-like” activity, so maybe this will be forced by the government of Korea to go to NetMarble,” said Mike Vorhaus, CEO of Vorhaus Advisors and a longtime game industry analyst. “But I think companies like EA, Amazon, Comcast could all be higher bidders because the value of Nexon is immense to them — for EA it fills some big holes at the company, for Comcast it gets them into gaming in a very big way – which is a better growth business than TV and films — and for Amazon it positions them as a major player, overnight, especially in PC and to some extent mobile games. If the company is forced to sell to NetMarble, I don’t think the shareholders will be getting full value unless they match these new offers.”
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No offense to Nexon, but in no reasonable world do I see them as being worth the $13.2B that they’re asking for. I certainly don’t see Disney buying as they’re still incorporating 21CF into the fold and I doubt Iger want to ruin his perfect acquisition streak with a questionable one right before he leaves.

To put it in perspective, Disney bought Pixar, Marvel and LucasFilm for only $15.4B COMBINED. It’d make more sense to go after Square Enix or something.
 
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AlexanderMBush said:
www.themiddlemarket.com

Comcast's CEO Considers His Next Big Move in the Transforming Media Landscape

His next big move will most likely involve Comcast’s media division.
www.themiddlemarket.com www.themiddlemarket.com

Seems Comcast is looking on the prospects of a megamerger again. This time again in gaming, but between Nintendo, EA, or Take Two.
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To me this brings back memories of When Universal actually had a gaming studio and the form of Universal Interactive Studios and classic games such as Crash Bandicoot and Spyro. It is going to be interesting to see what merger route they go whether it's WBD or a video game studio. You can bet they would create movies and TV shows based on video game IP. Not so sure about EA or Take Two IPs going into a Universal park as not only would that would conflict with their existing partnership with Nintendo but I am not sure they are a lot of EA or TT IPs that would work well as attractions or themed lands. Correct me If I am wrong though.
 
AlexanderMBush said:
www.themiddlemarket.com

Comcast's CEO Considers His Next Big Move in the Transforming Media Landscape

His next big move will most likely involve Comcast’s media division.
www.themiddlemarket.com www.themiddlemarket.com

Seems Comcast is looking on the prospects of a megamerger again. This time again in gaming, but between Nintendo, EA, or Take Two.
Click to expand...
They already passed on EA....the value wasn't there for the company.

They have big name games but with EA, you can't synergize when the biggest games are sports and sims.

Going to Take Two with Rockstar, they have tons of things ready for the media division but none are family friendly enough for the parks.

And Japan will likely never let an foreign company buy up one of the prized companies. (They almost did with nexon but this would be so unexpected)
 
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quinnmac000 said:
And Japan will likely never let an foreign company buy up one of the prized companies. (They almost did with nexon but this would be so unexpected)
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The only reason I wonder on Nintendo, lies in how deep their hands are getting with NBCUniversal as it is with Nintendo Pictures/Illumination and the current agreements with both Nintendo and UDE, and TPC and UDE.

I genuinely think a video game mega-merger idea is rancid and asinine as hell, but Nintendo feels like something that Comcast could try to shoot their shot if only to increase the control they have with NBCUniversal product.

Really hoping all of it goes nowhere and Comcast continues to invest in NBCUniversal.
 
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