December 9, 2006

UTV acquires stakes in UK co, Indiagames for Rs 128 cr

Source : The Economic Times
Dated : 09/12/2006

UTV Software Communications, the production and entertainment company, is now making strides into gaming and has acquired a controlling stake in Ignition Entertainment (Ignition) — UK-based console gaming company — and in Indiagames a mobile and broadband gaming company in India, for Rs 128 crore.

UTV’s acquisition of 51% equity stake in Indiagames, known as the largest gaming company in India, for Rs 68 crore, will make it one the largest players in the local gaming space. Indiagames reported an annual revenue of around $5 million for the last fiscal and houses close to 270 employees.

In the other deal, UTV bought 70% equity stake in the UK-based Ignition for around Rs 60 crore. The revenue of this 100-employee strong company is expected to be about $15 million for the calendar year ending December 2006.

When contacted, UTV CEO Ronnie Screwvala confirmed the development. “The acquisition comes with UTV’s interest in expanding its operations in game development, publishing and distribution across mobile, online and console platforms world-wide and the capability to create IP’s in all forms of content, including live Action and animation,” he said.

Mr Screwvala also said that UTV would invest Rs 135 crore in the development of animation movies over the next three years and at least three animation titles are expected from UTV’s motion picture slate by 2009.

With the acquisition of controlling interests in Indiagames in India and Ignition in the UK, UTV plans to capture world markets and intends building efficiencies through cross synergies in game acquisition for global markets.

The company will also derive cost efficiencies using India as a base for game development processes, using distribution strengths and relationships to market products better world-wide.

Indiagames is currently involved with mobile game development, in publishing and distribution across 67 countries, through 80 telecom partners like Vodafone, Verizon, Hutch and Airtel. It recently forayed into PC games distributed online through broadband ISPs like BSNL, MTNL, Airtel and VSNL.

Indiagames founder Vishal Gondal will continue to head the company and evolve synergies with other UTV businesses in the creation of cutting-edge games.

Ignition has strong relationships with hardware manufacturers, game developers and distributors such as Sony, Nintendo, Microsoft, SNK, Konami, Atari, Virgin and Wal Mart. That apart, Ignition is also in the process of developing a top-end game “WarDevil”, budgeted at around Rs 80 crore and is expected to release it in 2008 exclusively on the Sony Playstation3 (PS3) platform.

PS3 was launched in November 2006 in Japan and the US and is expected to sell more than 30 million units by the end of 2008. Earlier this year, UTV had announced its co-production with Will Smith’s Overbrook to make an animation production.



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