So if you had $83 million....

Discussion in 'Indie Business' started by DFG, Sep 12, 2008.

  1. DFG

    DFG
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  2. shed

    shed New Member

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    What to do with the money?

    Well $83mil is close to what you might get in an IPO, but no VC backed companies are IPOing in this market. My guess is it's a combination of
    i) Cash in hand in a potentially tough financial market for next 18 months
    ii) Acquisition Treasure Chest
    iii) Defensive against Real's spin off of games (though this is not as important as the above two).

    The other explanation is development, but why on earth would they need 80mil for that?
     
  3. DFG

    DFG
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    Consoles are one part:

    "Beyond online and downloadable games-- it distributes games such as "Mystery Case Files," "Azada" and "Hidden Expeditions"-- it is expanding into Nintendo Wii console games. "


    More on why it was raised:

    "This new round was a recap, and the new investors are buying out the handful of angel investors who contributed $8.7 million to help launch the company, plus new shares that are being issued, reports Seattle Times. Here's the best part, always: it didn't need the money, but raised it anyway. It's profitable and had sales of about $50 million last year. Seattle PI: In 2005, the company reported revenue of $8.6 million, rising to $24.1 million in 2006 and $50.8 million last year. "

    http://www.washingtonpost.com/wp-dyn/content/article/2008/09/12/AR2008091200410.html
     
  4. DFG

    DFG
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    Addtionally you could:

    1 - Launch a Japanese version of your site
    2 - Start a branch in Vancouver B.C. that could hold 50 positions
    3 - Move into a 57,000 square foot, prime Seattle waterfront headquarters
    4 - Support 310 employees
    5 - Pay a Goldman Sachs class CEO salary
    6 - Hire 60 more people

    http://seattlepi.nwsource.com/venture/378859_vc12.html

    On another note, I question the $2 billion casual games industry estimate if Big Fish is pulling $50 million a year. I suppose that $2 billion number lumps a lot of sources together to get that high including consoles, skill gaming, portables, and maybe some other weird stuff.
     
  5. Scharlo

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    Expand your existing brand to another platforms (retail & virtual console, mobile, Iphone...).
     
  6. Jack Norton

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  7. Grey Alien

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    post removed by me
     
    #7 Grey Alien, Sep 12, 2008
    Last edited: Sep 13, 2008
  8. Artinum

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    Pffft. Fools. I'd retire with $83m!
     
  9. Bmc

    Bmc New Member

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    They are opening an office in Vancouver, and from what I read they're expecting to hire 50 or so employees... if that is correct then your looking at a decent size chunk of that 83 mill right there.
     
  10. Scharlo

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    All this together is not even 10% of the amount. Even if you are talking about running this office for a full year. (I have 50 employees and I know what the expenses are for 50 people studio).
     
  11. Desktop Gaming

    Moderator Original Member Indie Author

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    Spend it.

    :D
     
  12. shed

    shed New Member

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    Yeah agreed - assuming a loaded rate of (at most) $150K/year/person - that's only 7.5mil/year, and that assumes no net incremental revenue.

    Also - it appears that they may be profitable according to news sources - that of course does not necessarily mean cash flow positive, so they may have some burn, but I can't believe it's more than a few mil a year. So the question remains what do they do with all that money?

    Alternatively the big shareholders cashed out big, and they're getting a significantly lower amount in cash.

    Also note that it said they got common stock which is highly unusual in a VC transaction.
     
  13. SteveZ

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    "Big Fish also may consider growing through acquisitions, though Lewis said nothing is in the cards and he discounted the possibility of using the new war chest to "roll up" other casual game companies."

    Probably not. But he could be just saying that so relevant development teams don't get too excited and try to make themselves more "presentable" :rolleyes: who knows
     
  14. vjvj

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    In other words, you'd restart Gizmondo Ireland :)
     
  15. jcottier

    jcottier New Member

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    When you think about it, with all that money they could create 500 casual games or hardly a couple of AAA game.

    JC
     
  16. Jack Norton

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    I don't think they hired people who worked in a MMO in november 2007 to have them work on a match3... :rolleyes: plus everyone is going into MMOs now, so my guess is still probably the more realistic (I mean not pure speculation but with some hard facts).
     
  17. Bmc

    Bmc New Member

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    When I mentioned decent sized chunk I was talking about 5-10 million. Vancouver is an expensive city so I imagine the office would be pricey on it's own, and then while salaries might not be in 100k range, I imagine the lowest may be above 50k. I was also thinking about operating costs for 5 a year period (for some reason)
     
  18. Acord

    Acord New Member

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    Start my own version of Steam and retire?
     
  19. SteveZ

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    Right, I'm aware of the difference between IP acquisition and buyout. And no, I have no answer. I'm as curious as some of the folks on this board.
     
  20. arcadetown

    Moderator Original Member

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    "Oftentimes in large venture rounds involving mature companies, executives take the opportunity to cash out some of their stock."

    Plus use some to grow further, stick some in the bank, and make some aquisitions? Maybe good time for a DFG type to put out feelers? There's money to be spent from huge investment inflows made last year but I suspect the available investment capital will dry up soon given current banking turmoils.
     

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