Scopely, the Spanish-accented video game giant sold to a Saudi fund | Business

The year is 2002. Smartphones as we know them are still an entelechy in the minds of some visionaries. It’s even more unlikely to imagine that in just a few years, people will be spending hours playing fruit-matching games or slingshotting birds on a black rectangular screen that fits in the palm of their hand. And 22 years ago, video games were on consoles. Only a few sneak up and make their way into your pocket, like Tetris or Snake, making the keys on an old Nokia 3310…

2002 Smartphones as we know them are still an entelechy in the minds of some visionaries. It’s even more unlikely to imagine that in just a few years people will spend hours playing fruit matching or slingshotting birds on a black rectangular screen that fits in the palm of their hand. And 22 years ago, video games were on consoles. Only a few sneak through and find their way into your pocket, like Tetris or Snake, which made the keys of the old Nokia 3310 smoke. But even in such a bygone era, it was already clear to some that this was one of the keys to significant growth in the sector. And they decide to bet on this guess. It is in 2022 that Javier Ferreira (Madrid, 1976) begins his career in mobile game development.

Fast forward to the present, and Ferreira shares the CEO title of Scopely with Walter Driver, one of the company’s founders. Scopely, founded in California in 2011 as launch or a growing company hungry for all the funding that venture capital funds could give it, eventually becoming one of the largest multinational corporations in the mobile gaming sector. Its star product is Monopoly Go, a mobile phone version of the popular capitalism game released in 2023. With this game alone, Scopely generates $300 million in revenue per month thanks to the more than 20 million users who have it every day. The company’s total turnover is over $4 billion annually and has grown by double digits almost every year since its inception. Last year, Savvy Games Group, owned by Saudi Arabia’s sovereign wealth fund FIP, which is trying to diversify its investments by entering different sectors, bought Scopely for $4.9 billion, which was the sixth-largest sales transaction in the mobile games sector at the time.

The transformation of the mobile gaming world over Ferreira’s 22-year career has been enormous. “Sometimes the importance of this industry is not realized, perhaps because of a generational problem, but it is central: we all play, and it is the entertainment industry that has the most revenue and users in the world,” he explains. at the Scopely office in Barcelona, ​​which Ferreira visited in late April with other members of his team. The sector is going through a tough time, like all tech companies, and the big ones have made layoffs, but it is still huge: according to estimates by the analytics company Newzoo, the global turnover in 2023 will be $184 billion – in Spain, according to the Spanish Video Games Association, the turnover in 2022 was 2,012 million euros.

Although Spain represents a relatively small part of the world turnover, it is a pole of attraction for video game companies, as evidenced by the headquarters of various multinational video game corporations that have settled in Spain. Scopely arrived in Barcelona in 2017, and in 2020 landed in Seville. Of Scopely’s more than 2,300 employees, about 800 work in the Catalan capital and about 200 in Seville. “We are the first video game company in Spain in terms of number of employees, but we also have a global technology headquarters in Barcelona, ​​where the Playgami platform is developed, and many of our products are developed here,” says Ferreira, who believes that Spain has great potential for talent, but lacks its own business structure.

New partner

The sale to the Saudi group, Ferreira explains, served as a return to the shareholders who had invested in Scopely, as well as the employees hired by Scopely. stock options (stock options that startups They are usually given to employees who want to join the team and converted into cash during the sale). “We also needed a partner like Savvy who would allow us to be very ambitious and have a long-term vision. No one has a dominant share in our industry, and this partner can provide us with the financial support to grow,” explains Ferreira, who rules out that an IPO would be the best alternative. Some of the companies Scopely competes with have nevertheless decided to go public, such as Nasdaq-listed Electronic Arts or Activision giant Blizzard King, which later ceased trading when it was acquired by Microsoft in a deal that closed the latter for $69 billion a year. Other competitors are part of large tech groups, such as American Riot Games, owned by China’s Tencent.

Monopoly Go makes up a significant portion of Scopely’s revenue, but Ferreira boasts a wide range of its products: Stumble Guys, Marvel Strike Force, Scrabble Go, Star Trek Fleet Command or Yahtzee With Buddies, the latter being a game that launched in 2011 and has grown. until it hit record revenue two years ago. “There are businesses that continue to exist 15 years after they were launched. This can only be achieved if you can improve the product every month by investing in development and marketing. We did that with Yahtzee and we’re doing the same with Monopoly Go,” explains Ferreira, who says there are currently six more games in development.

“Traditional video game companies didn’t understand this very well,” he says, referring to the traditional business model of developing a game, publishing it, and not making any further profit. The model for mobile games is different: games are usually free at the time of download, but are monetized as they are played or if the user wants to access more parts or elements of the game. “It’s a very established business model because it’s very good for users as they can try and find out what game they like without barriers to entry, and then improve it by investing time and money. And this is a very good model for companies because it allows them to generate continuous income over time,” he elaborates, although he admits that the most difficult thing is to analyze the data well in order to develop a game that will be supported in the long term.

Ferreira, who developed his career in the gaming sector at Disney, Jamdat Mobile and Electronic Arts before joining Scopely in 2014, remembers playing Metal Gear or the first Legends saga on his Msx 2 as a child. Zelda. He now continues to game, especially on his mobile phone, and plays Fortnite with his son. There are still years left in his career, and judging by how the sector could be transformed by virtual reality, what sounds new now may end up sounding as old as the Nokia snake that was so fashionable 20 years ago.

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