The online game publisher Wargaming has had a smashing success with its World of Tanks game. Now it will try its hand at console game development with the acquisition of Day 1 Studios in Chicago for $20 million.
It’s a case of an upstart swallowing a traditional game studio, as Day 1 has made titles such as MechAssault, Fracture, and F.E.A.R. 3. While many companies have been moving into the new world of digital games, this deal shows that it’s possible for the digital upstarts to reverse that flow and take over the console business. Against the backdrop of the bankruptcy of THQ (a big traditional game company), the rise of Wargaming and its World of Tanks game should be a warning to game companies that are accepting the status quo. Just a few years ago, Wargaming could have been dismissed as a single-game online company. Now it is the guppy that is eating the sharks.
Day 1 will focus on an unannounced console title, setting in motion Wargaming’s expansion into multiplatform game development. Wargaming previously acquired Australia’s Big World to acquire game development tools and server middleware. It has been able to do these deals because of the enormous success of its free-to-play online game World of Tanks, which closed in 2012 with 45 million players, up 27 million from a year earlier.
“The move into console game development is a huge step for Wargaming as we begin to expand our presence into new platforms,” said Victor Kislyi, the chief executive of Wargaming, based in Nicosia, Cyprus. “We are looking forward to sharing the fruits of our labor soon.”
The company will hire new staff to beef up the Day 1 team.
“Wargaming is a clear leader in the free-to-play space and helps set the standard on which all other games in the genre strive for,” said Denny Thorley, the new head of its Chicago-based studio. “Our team is extremely excited to start the first console project for Wargaming.”
While the rest of the traditional retail business is suffering, hardcore online games like World of Tanks are stealing all of the fans. Market researcher Superdata Research says in its own analysis that World of Tanks has twice the average revenue per monthly active user for an online game.
World of Tanks is gaining popularity in part for its participation in e-sports tournaments. It was included in the finals of the World Cyber Games 2012 in China. Wargaming is also exploiting the franchise further by coming out with a series of books about the history of armored vehicles. The first World of Tanks branded book is about the military engineering program that the Germans had before World War II.
In 2013, Wargaming says that World of Tanks is going to conquer new territory with a collectible card online strategy game called World of Tanks Generals, which release this year as a browser and desktop-based title. The company is also working on two large-scale massively multiplayer online games, World of Warplanes and World of Warships. The closed beta test for World of Warplanes, an air combat game, has had more than 1.5 million applications. Wargaming plans to tie all the games together into a single economy, so users can sign into them via a single account. The company also has its own MMO game platform service, which is open to other developers to use.
Before the acquisition, Wargaming had more than 1,300 employees in 11 offices on four continents. To date, Wargaming has released 15 titles since it was founded in 1998, but World of Tanks is clearly its mega hit.
Superdata says that the average revenue per monthly active user for World of Tanks is $7.58, compared with $2.52 for Nexon’s MapleStory and $1.44 for Neowiz’s CrossFire game.