MocoNews has learned that mobile games developer Hands-On Mobile is shedding its European game business six years after acquiring the company. This division, which also covers the Middle East and Africa, will be transferred to an expanded Connect 2 Media, a cross-platform game developer. The business goes right back into the hands of Eric Hobson, CEO of Connect 2 Media, who originally sold the earlier incarnation of the division, Blue Beck Media, to Hands-On six years ago. He left Hands-On earlier this year to join Connect 2 Media. Hands-On will retain a minority stake in the operation, which at the same time is receiving a $6.7 million investment from Acuity. Hands-On injected some cash into the deal, as well, but it was minimal since the deal was mostly pegged around the transfer of its EMEA assets. This follows Hands-On’s sale of its Korean division to EA less than two months ago for $29 million in cash.
Niccolo de Masi, president of Hands-On, explained the move in an interview today: “We’ve been looking at how we can bulk up our distributing ability in EMEA for a while now.” The company had to buy or build in order to achieve that and thinks it’s getting both with this deal. By “rolling ourselves into one vehicle,” the company’s opportunity will grow substantially by getting more boots on the ground and combining each of the parties’ areas of expertise across multiple platforms. “We’ve effectively taken a smaller stake in a much larger entity… We don’t consider ourselves to be selling anything to be honest.” Hands-On wouldn’t disclose how much of a share it gets in the bigger company, but said it retains all the rights that come with being a minority shareholder. Acuity and Connect 2 Media will also be minority shareholders in the newly merged company, leaving no party with a majority share. Hands-On plans to increase its equity in the company through continued investment, De Masi said, adding that exact terms should be cleared up by the end of the year.
Global reach is essentially required for any mobile games publisher to make money off a particular title and to compete with the likes of Glu Mobile and Gameloft, which have large reach and a global footprint. De Masi agreed and said the deal will give all parties a wider reach and expertise on multiple platforms. “We’ve really done this mostly because we’re getting more monetization” out of the titles, he said. As for bringing the division back full circle, De Masi said: “We wouldn’t be doing this if we didn’t have faith in our ability to continue working together.” Terms of the deal that originally brought the business to Hands-On have not been made public and so it’s difficult to say how well the company fared on the acquisition. “Ultimately it’s hard to put a value on those sorts of things. We’ve done well in the short term in our investment in EMEA,” De Masi said.
Korean sale: Hands-On originally bought the Korean business in 2004 under the name MobileGame Korea, which it later re-branded to Hands-On Korea. Following this latest deal, the company’s only other business outside the U.S. is in China, where it admittedly faces difficult regulatory issues. Asked if the company made a concerted decision to focus internally on the U.S. market, De Masi replied: “We are, of course, big believers in the U.S. That’s not to say we’re looking to reduce our exposure anywhere else in the world.” Overall, the company’s strategy is to reach more platforms with its titles, he added.