TheGamingEconomy’s Daily Digest brings you the prevalent business stories in gaming. In today’s news: Niantic acquires 6D.ai; iDreamSky and CVC to lower Leyou bid; and mobile gaming on the rise during Covid-19.
Niantic acquires 6D.ai
Niantic has acquired fellow augmented reality (AR) firm 6D.ai for an undisclosed sum, as it bids to expand its offering within gaming as well as to other enterprise applications. 6D.ai is based in San Francisco and has built a range of APIs allowing smartphone cameras to detect and interpret 3D structures. Under the terms of the acquisition, these APIs will be shuttered as standalone products and instead integrated within the Niantic Real World platform.
6D.ai was originally formed in 2017 as a spun-off unit of the Oxford University Active Vision Lab, and since recieved an undisclosed level of funding from General Catalyst and Alumni Ventures; as a range of angel investors including Amitt Mahajan (Presence Capital); Jacob Mullins (Shasta Ventures); and Greg Castle (Anorak Ventures).
In his statement announcing the acquisition, 6D.ai CEO Matt Miesnieks spoke on the need for an independent AR provider to rival big tech platforms such as Facebook, Apple, and Google. He wrote "For AR to truly become the next platform that all apps run on, it needs to be built by a trustworthy, independent player with a business model that centers around the needs of developers and with core values that are built around the needs of the end user. After years of working with developers, businesses and artists alike, the need for an independent player in AR has never been more essential."
iDreamSky and CVC to lower Leyou bid
iDreamSky Technology Holdings Ltd. and CVC Capital Partners are in talks with Leyou Technologies Holdings Ltd. aimed at lowering their joint acquisition bid for the latter, which was previously estimated at USD$1.4bn (£1.1bn). According to anonymous internal sources, a number of factors is behind the renegotiation of the acquisition terms, including a marked decline in Leyou's earnings and volatile market conditions as a consequence of the ongoing coronavirus pandemic.
As previously reported in TheGamingEconomy, iDreamSky has been in exclusive talks to purchase Leyou since December last year, with CVC mooted as a buyout partner from February. Under the terms of the proposed acquisition, iDreamSky would become the majority shareholder in the combined unit, with CVC holding a "significant minority stake", however it is unclear whether this will be altered under a renegotiated deal.
Following news of the renegotiation, iDreamSky Technology Holdings Ltd. (HKG: 1119) closed down 1.19% at HKD$4.98 (£0.52), while Leyou Technologies Holdings Ltd. (HKG: 1089) ended the day up 0.44% at HKD$2.28 (£0.24).
Mobile gaming on the rise during Covid-19
Data released by IronSource suggests that the number of people playing mobile titles has increased substantially following the outbreak of the Covid-19 strain of coronavirus. Since March 13th, weekday daily average users (DAU) in the US rose by 13%, with the increase even more significant in South Korea when lockdown policies were imposed on February 20th, with DAU rising by 23%. Relative engagement with in-game advertising has also increased during this time, up across all markets analysed, namely the US (6%); China (15%); South Korea (6%); and Italy (7%). Despite an increasing base of engaged consumers, effective cost per thousand ad impressions (eCPM) decreased slightly across the board as advertisers scaled back marketing efforts in anticipation of a global recession.
The data follows news that other areas within gaming are also seeing a benefit from the self-isolation and lockdown mandates imposed globally, with video game streaming increasing by as much as 66% (StreamElements and Arsenal.gg and general usership rising by as much as 75% (Verizon).
Writing on Medium.com, IronSource VP of revenue Amir Shaked stated, "With traditional brand advertisers reducing mobile marketing spend on the one hand, and players looking for new games to fill the time on the other, user acquisition teams at game companies have an opportunity to test and adapt their user acquisition strategy to connect with more high quality users. Having said this, it’s important to look at both sides of the coin — both monetisation and marketing — to ensure that your UA campaigns are ROI positive."