Back in January, Zynga’s chief game designer Brian Reynolds, who was also behind older hits like Rise of Nations and Civilization II, quietly left the company.
He’s popping up back on the scene this month with a new company called SecretNewCo (appropriate, eh?), and the startup is announcing a strategic partnership with Tokyo-based gaming giant Nexon today. The Tokyo-based company is investing an undisclosed amount of capital in Reynolds’ company for a minority stake. While Nexon isn’t sharing how much it invested, just assume it’s a very early-stage investment.
The deal will give Nexon worldwide publishing rights for SecretNewCo’s flagship game, which has an appropriately named working title of “SecretNewGame.” SecretNewCo’s flagship game itself sounds reminiscent of Civilization. The title is a “mobile strategic social network game” where the player begins as the leader of a tribe in the Stone Age and has to guide their civilization through all ages of human history. Like in Civilization, they can trade with their friends, launch raids against enemies, form alliances and defend against attacks from other players.
Nexon is making this deal to appeal to Western audiences after building up longstanding franchises in China, Japan and South Korea like MapleStory.
“We have had our eye on a few people in the West and Europe who we’ve been thinking about for a while,” said Nexon’s chief financial officer Owen Mahoney. “When Reynolds left Zynga, we struck up a conversation about what his next plans were.”
While Nexon generated nearly $450 million in revenues in the first three months of this year, European and North American markets contributed less than 5 percent of the company’s revenues during that time. In contrast, China makes up nearly half of Nexon’s revenue base.
So the company is looking to grow its presence in the West at a time when barriers between international markets are falling. Games that have historically done well only in Japan or China now have the ability to reach a fully global audience through the Android and iOS platforms. Japan’s mega-hit Puzzles & Dragons is now at 16th place on the top-grossing charts in the U.S. while Western titles like King’s Candy Crush Saga and Supercell’s Clash of Clans are doing well there.
More deals with Western game developers could patch up Nexon’s offerings in these markets. Mahoney says Nexon is looking at acquisitions and strategic investments of all sizes, from very early-stage deals to ones that could be in the hundreds of millions of dollars. The company had 110.5 billion yen ($1.1 billion) in cash on its balance sheet at the end of March.
“We’re not limited in size. We have a large cash position, so we’re well-capitalized and able to move for things that are large when they become available,” Mahoney said. “But we think that the opportunities are going to be a range of both small, medium and large deals and it depends on the creative orientation of the team, whether they have the same approach to building companies and franchises over time, the valuation, and how our teams and theirs get along.”