Zapak set to buy out Sony Online for $300 mn

microAmp

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Jul 5, 2000
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NEW DELHI: Zapak Digital entertainment, the online gaming company promoted by Anil Ambani-led ADAG group, is all set to buy out Sony Online Entertainment (SOE) for around $300 million (Rs 1,200 crore).

According to sources close to the development, the deal will be finalised within the next few days. Sony Online was on the block for the past two weeks and Zapak, which has been looking for acquiring international studios, is finally said to have reached a consensus over the valuation of Sony Online.

?The deal is almost through. It is in the final stages of negotiations and by next week, Zapak will have a full right to all content, owned and published by Sony Online,? sources told SundayET.

Sony Online Entertainment is the game development and game publishing unit of Sony and posts revenue of around $ 150 million (the company doesn?t reveal the exact details for the division). It has in the past come out with popular games such as Everquest, PlanetSide, Star War Galaxies and Vanguard. SOE?s headquartered at San Diego, California, with additional game development studios located in Austin, Texas, Denver, Colorado and Seattle.

This acquisition is in line with the future plans of Zapak Digital, which is planning to enter the gaming space in China by early next year. ?This makes perfect sense for us, as around 80% of content in the gaming industry is manufactured internationally. Buying out Sony, will not only give us access but also expand our reach in the global market,? said a senior Zapak Official.

The major expenses in the gaming industry is on content and marketing, and Zapak aims to reduce the cost of publishing a game by buying out those studios and relocating them to India. ?This will reduce the cost drastically from $30 mn to $10mn, which will give us the advantage to channelise our funds towards marketing and other activities,? the official said.

In the recent past, Sony has aligned with Virgin Comics, a Bangalore-based collaboration of famed, self-help guru Deepak Chopra, filmmaker Shekhar Kapur and Richard Branson of Virgin Group. After the proposed acquisition, Zapak plans to retain control over all the deals, which has been signed by Sony Online.

According to the latest IMRB report, there are about 2.8 million online gamers in India and the online gaming industry is worth Rs 21 crore. Zapak is one of the top players in the Indian gaming space.

Just saw this too... Smeldy denies it here...
 

Schadenfroh

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Mar 8, 2003
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From your link:
This story is completely false. We aren't for sale

No idea who made this up. We are in discussions with various companies in India about bringing our games to this growing market but that's it. We aren't for sale.

Smed (SOE President and CEO)
Think Sir Howard made a deal without telling Smed?
 

microAmp

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Jul 5, 2000
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Originally posted by: Schadenfroh
From your link:
This story is completely false. We aren't for sale

No idea who made this up. We are in discussions with various companies in India about bringing our games to this growing market but that's it. We aren't for sale.

Smed (SOE President and CEO)
Think Sir Howard made a deal without telling Smed?
Could be, could also be the normal way CEOs always deny things before they get announced. The story also made Reuters but was the same as the one I grabbed the news.
 

Schadenfroh

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Mar 8, 2003
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Originally posted by: microAmp
The story also made Reuters but was the same as the one I grabbed the news.
Reuters

MUMBAI (Reuters) - Sony Online Entertainment on Sunday denied an Indian media report that said Zapak Digital Entertainment Ltd, part of the Anil Ambani-led ADAG group, was buying Sony Online and said the company was not up for sale.

India's Economic Times, citing anonymous sources and an unnamed Zapak official, had earlier reported that Zapak was set to buy Sony Online for about $300 million.

"Sony Online Entertainment is not for sale and the report that Zapak is purchasing Sony Online Entertainment is completely erroneous and false," a company spokesperson for San Diego-based Sony Online told Reuters over telephone.

Sony Online is the game development and game publishing unit that is part of global electronics maker Sony Corp's group.
 

flashbacck

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Aug 3, 2001
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Originally posted by: Bateluer
Hopefully, this is false.
Except for Everquest, SOE hasn't really been succesful, has it? It's not like Zapak would make anything worse...
 

BladeVenom

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Jun 2, 2005
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Originally posted by: microAmp

Could be, could also be the normal way CEOs always deny things before they get announced.
Seriously, a Sony denial makes me more likely to believe it.
 

chizow

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Jun 26, 2001
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Ouch...I could see this as a regional licensing deal except the #s seem about right (if not overvalued for something like SoE) for a buy out.
The major expenses in the gaming industry is on content and marketing, and Zapak aims to reduce the cost of publishing a game by buying out those studios and relocating them to India. ?This will reduce the cost drastically from $30 mn to $10mn, which will give us the advantage to channelise our funds towards marketing and other activities,? the official said.
And that part...ouch! I remember when I played PS all the devs like living in SD. Looks like now its gonna be New Delhi or New Jobhi.
 

microAmp

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Jul 5, 2000
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Originally posted by: flashbacck
Originally posted by: Bateluer
Hopefully, this is false.
Except for Everquest, SOE hasn't really been succesful, has it? It's not like Zapak would make anything worse...
When Star Wars Galaxies rolled out, it was considered a success with 500k subscribers, great numbers for its time. Of course after that it wasn't handled very well. ;)
 

effee

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Sep 4, 2004
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Too bad, most of the games that SOE has, speaking in MMO terms have either flopped, or will flopped..with the exception of EQ2, which is less than stellar
 

flashbacck

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Aug 3, 2001
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Originally posted by: Kazaam
why the hell would you sell a company making 150mil a year for only 300 mil?
Their revenue is $150mil, it doesn't say anything about expenses.
 

Dumac

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Dec 31, 2005
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Originally posted by: flashbacck
Originally posted by: Bateluer
Hopefully, this is false.
Except for Everquest, SOE hasn't really been succesful, has it? It's not like Zapak would make anything worse...
By the time SOE swallowed Verant, EQ was starting to head downhill.
 

Arglebargle

Senior member
Dec 2, 2006
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Originally posted by: microAmp
Originally posted by: flashbacck
Originally posted by: Bateluer
Hopefully, this is false.
Except for Everquest, SOE hasn't really been succesful, has it? It's not like Zapak would make anything worse...
When Star Wars Galaxies rolled out, it was considered a success with 500k subscribers, great numbers for its time. Of course after that it wasn't handled very well. ;)

It rolled out well because it had the words 'Star Wars' in front of it. It was poorly handled from the get go by the higher ups, but in the early days it didn't get in its players' way as much. A half decent version would have done gang busters. Now, I doubt if it is any higher than 3rd place for SF/future type games.
 
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