THQ Nordic acquires Koch Media GmbH (Deep Silver)

Pretty big news! Deep Silver is now part of THQ Nordic. I would have assumed that Deep Silver was in a stronger position than THQ Nordic, but I guess Homefront and Agents of Mayhem underperforming and Dead Island 2 being rebooted played into this move. It’s funny to think that after everything that happened Metro, Homefront, and Saints Row are back under the THQ banner again!

THQ Nordic has entered into an agreement to acquire Koch Media GmbH, including, inter alia, the games developer and publisher Deep Silver with AAA-intellectual property rights such as Saints Row, Dead Island and exclusive licence for Metro.


THQ Nordic AB (”THQ Nordic” or the “Company”) has, through its wholly owned subsidiary, SALEM einhundertste Holding GmbH, today entered into an agreement with the owner, Koch Media Holding GmbH (the “Seller”), of Koch Media GmbH (“Koch Media”) to acquire 100 percent of the share capital in Koch Media. The total consideration amounts to EUR 121 million on a cash and debt free basis (the “Transaction”).

Koch Media is a leading, independent producer and marketer of digital entertainment products in Europe and North America with studios in Germany, the UK, and the US, and offices in several Central and Northern European cities. Koch Media’s business consists of three business areas; i) Games, which are mainly published under the Deep Silver label with several AAA-intellectual property rights such as Saints Row, Dead Island and Metro; ii) Partner Publishing, which is the leading company in this business area in Europe and iii) Film, which is a business within movies for primarily the German and Italian speaking territories. Koch Media generated net sales of approximately SEK 2,548 million and Adjusted EBIT[1] of approximately SEK 296 million for the period April - December 2017.

The new group generated pro forma net sales and Adjusted EBIT for the period April - December 2017 of SEK 2,933 million and SEK 505 million, respectively.

Yeah, this is definitely somewhat unexpected.

This is excellent!

The situation must’ve been pretty dire at Deep Silver if they could be acquired for roughly the development and marketing costs of a single AAA game.

Wow this is completely bizzare and unexpected, I also thought Deep Silver was lot stronger than Nordic.

But cool, Nordic published my favourite RPG I am playing right now (Elex) and now they also apparently publish my favourite RPG that I will play right after (Kingdom Come). Not bad.

What does this mean for Volition, I wonder? New corporate masters who make no changes to the recently downsized studio?

It better mean Freespace fucking 3, is what.

Deep Silver was never a solid player and all their moves after the material acquisition have been pretty terrible. They overextended themselves badly.

We already have FS3. It’s called “Star Citizen”.


It is true that somehow they totally messed up Homefront 2 (wonderful game patched, DOA), Dead Island 2 (MIA) and Agents of Mayhem (possibly great game according to Tom, but DOA). So yeah I suppose it makes lot of sense that they were in not a very good position and saw selling as preferable.

Who got the freespace rights in the Interplay auction? I recall seeing that they went for very little cash - to the point where I almost wish i’d bought them.

During today’s investor presentation, THQ Nordic revealed that Agents of Mayhem only sold 300,000 copies, while Homefront: The Revolution managed 1.2 million, though I imagine most of those were after the game had been substantially discounted. Fortunately, both studios are working on unannounced AAA titles.

Someone over on ResetEra found a posting on a Dambuster employees Linkedin page suggesting their next game will be another sandbox first person shooter, although this time it will run on Unreal 4, will release in 2019, and is based on a 10+ million selling IP, which immediately rules out Homefront.

Some research on my own question - after Interplay got the rights from THQ in 2013 for a mere $7500, they were packaged in an overall sale package of Interplay IP that was announced in 2016 but which I can’t find any update on after that announcement, which implies that the sale didn’t happen and interplay still owns that IP.

God dammit (also sorry I didn’t answer, was away from my computer for a spell).

This is kinda funny because Nordic and Deepsilver are the two parties that bought most of THQ’s assets and by combining they’ve basically just recreated pre-collapse THQ. Just without the warehouse of unsold uDraw tablets.

You’re not the only one. Not like I could have afforded it if somebody actually bid real money, but I wish I had tried anyway.

Some background infos can be found in a local newspaper, Tiroler Tageblatt. Quick and dirty summary / translation:

Mr Koch, age 66, decided to retire. His children weren’t interested in running the company. “So a sale of the company was taken into consideration”.
The negotiations lasted for four months.

The management, with the exception of Mr Koch, will stay. He will be replaced by THQ Nordic’s CFO.
Even more - from the press release in the original post: “Koch Media was founded in 1994 by Dr. Klemens Kundratitz and key management and has remained an entrepreneurial company since. Dr. Kundratitz will remain as CEO of the company and becomes a THQ Nordic shareholder after the Seller’s distribution of the Share Consideration.” He will become a major shareholder.

Managing director Reinhard Gratl says the Koch Media group has a yearly revenue of 300M EUR. He expects a growth to 360M EUR this year. THQ Nordic’s revenue is 40M EUR.

Koch Media has roundabout 800 employees.
427 of them not in development (->PR).
"[According to Mr Gratl,] Franz Koch’s […] target during the sale [negotiations] wasn’t profit maximization. He had simply reached retirement age. His primary motive was securing the company’s further business and [securing] jobs, which had an effect on the sale price. (Note: The German context implies Mr Gratl says between the lines that THQ Nordic paid less but had to give job guarantees of some kind for the rank and file employees.)

Revenue distribution according to the PR: "Approximately 26 percent [of 300M EUR, see above] of net sales during the period were generated from Games, 67 percent from Partner Publishing, and the remaining 8 percent from Film. " (Partner Publishing is Koch’s distribution business. They have exclusive retail distribution deals for certain countries with publishers like Sega or Capcom, and also for non-gaming software.)