Metaverse Pioneer Improbable Sells Multiplayer Group in £76.5M Deal as Web3 Games Struggle

10 months ago 3

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Metaverse company Improbable has divested one of its key gaming ventures, The Multiplayer Group (MPG), to Keywords Studios for a substantial £76.5 million ($97.1 million). The deal is surprising, considering that the metaverse and web3 sectors have been struggling as of late.

Keywords Studios is primarily known for developing games for third-party developers. The acquisition of MPG bolsters Keywords’ position in the gaming industry.

Improbable Sells Gaming Venture to Keywords

However, the acquisition came at a time when Keywords Studios was experiencing financial shifts. Despite its aggressive acquisition strategy, earmarking 91.9 million euros ($100 million) for new takeovers, Keywords has witnessed a significant drop in its shares, approximately 49% year-to-date.

This spending spree has led to a transition from a net cash position to a net debt of €11.4 million as of June 30, 2023.

Herman Narula, Improbable’s co-founder and CEO, explained that this deal aligns with the company’s “venture builder” strategy. Narula stated:

“The thought was, if we understand multiplayer well, and we understand metaverses, maybe we can spot opportunities where we can bring things in the den that we can do well with.”

This strategy also involves investing in or acquiring gaming and metaverse-related teams with the potential for expansion or spin-offs.

Are the Metaverse and Web3 Gaming Niches Past Their Prime?

Improbable’s decision to sell MPG hints at a broader trend affecting the metaverse and web3 gaming sector.

A recent study reveals a high failure rate for web3 games, with 75.5% of the 2,817 web3 games launched from 2018 to 2023 not succeeding. Furthermore, this statistic underscores the volatile nature of the emerging web3 gaming market and the challenges companies face in this space.

The metaverse sector is still growing and evolving. The strategies of companies like Improbable and Keywords Studios could potentially shape the future of gaming and virtual world experiences.

All in all, the potential of the metaverse and a decentralized web is vast. Their best use cases and products associated with these industries will need time to grow.

Read more: Web2 vs. Web3: What’s the Difference?

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