Atari acquires Hipster Whale for up to 40 million dollars

The assembly lines of the seasoned video game veteran continue to broaden their territories through an aggressive mergers and acquisitions strategy in global markets. Before closing this new deal in the portable sector, the company had already completed the acquisition of the emulation studio Implicit Conversions for an undisclosed sum, in addition to securing intellectual property rights over the first five games of the classic RPG franchise Wizardry. This intense movement gained strong momentum over the past year when the company shelled out 20 million dollars to fully absorb the team from Digital Eclipse. Subtly, we can see how these traditional brands, which lost relevance in the home console market, are attempting to rebuild their empires by acquiring smaller studios in series, betting on a surge of acquisitions to inflate their financial reports while the development of new large-scale original games takes a back seat.

The latest target of this investment round was the Australian developer Hipster Whale, globally known for creating the massive mobile hit Crossy Road. The commercial deal was structured with an initial payment of 29.3 million dollars — consisting of 26 million dollars in cash and another 3.3 million dollars converted into newly issued common shares by the buyer. The contract also provides for an additional performance bonus of up to 10 million dollars, which can be paid in cash over the next three years, strictly tied to the revenue targets that the studio achieves in digital stores.

The institutional justification presented by the board indicates that the arrival of the Australian studio will serve to expand the publishing and development capacity geared towards smartphones and tablets. The restructuring plan anticipates that the co-founder of the acquired developer, Matt Hall, will take the direct leadership of this new portable business division. Subtly, a clear contradiction is noted in the nostalgic rhetoric of the companies, who love to preach about reviving the classic arcade spirit of the 80s, but when it comes to investing real money, they run to the mobile market seeking microtransactions and short-term casual games to try to capture a slice of the mobile audience.

Atari and Hipster Whale share the same DNA for classic games in retro style. Together, we can leverage each other's strengths — they for mobile games and us for premium games — to significantly expand our business in the mobile sector. The acquisition is a major milestone in our growth plan." — declared the publisher's CEO, Wade Rosen.

The trajectory of the acquiring brand went through profound structural and geographic transformations last week, when 95.25% of shareholders approved the change of the company’s legal headquarters from France to Luxembourg. Originally founded in the United States in 1972, the brand moved into the hands of the French publisher Infogrames in 2000, after being acquired from Hasbro Interactive. Subsequently, Infogrames itself underwent a rebranding process and adopted the name Atari SA.

"We love arcade games. When we created Crossy Road, we set our company’s mission: to bring the arcade spirit to new audiences on mobile devices — a focus that resonated with players around the world and surpassed 340 million downloads over the last decade. Joining forces now brings together what each company does best: our unique approach to mobile development and their classic intellectual properties, licensing power, and media reach." — explained Matt Hall when assessing the merger of scopes.

Subtly, the critique is that this transaction highlights how the current industry prefers recycling past glories over creating truly innovative concepts. Tying an independent studio, which built its fame by creating simple and efficient mobile games, to the licensing contracts of fifty-year-old brands seems more like a desperate maneuver to cash in on consumer nostalgia rather than a genuine step towards the future of gaming. It remains to be seen whether this merger of brands will result in interactive experiences worth the investment or if the Australian studio will simply become a factory for generic remakes to supply the dwindling catalog of its new owner.