Improbable, a major player in the metaverse arena, has sold its gaming division, The Multiplayer Group (MPG), to Keywords Studios. This transaction, valued at £76.5 million (approximately $97.1 million), comes as a surprise against the backdrop of recent struggles in the metaverse and web3 sectors. Keywords Studios, renowned for game development services to third-party clients, has strengthened its industry standing with this acquisition.
Financial Dynamics at Keywords Studios
This purchase by Keywords Studios emerges amidst their own financial fluctuations. Despite a bold strategy of acquisitions, earmarked at 91.9 million euros (around $100 million), the company has observed a notable 49% decline in its share value year-to-date. This aggressive approach has altered Keywords’ financial position, shifting from net cash to a net debt status, totaling €11.4 million as of June 30, 2023.
Improbable’s CEO and co-founder, Herman Narula, described the sale as a strategic move aligning with the company’s broader vision of nurturing and expanding gaming and metaverse ventures. This approach indicates a focus on identifying and leveraging opportunities in multiplayer and metaverse domains, potentially leading to the expansion or creation of new spin-offs.
The State of the Metaverse and Web3 Gaming
Improbable’s decision to offload MPG reflects a larger trend in the metaverse and web3 gaming sectors. Recent studies have shown a concerning failure rate among web3 games. An astonishing 75.5% of the 2,817 web3 games launched between 2018 and 2023 have not succeeded. This highlights the volatile and challenging nature of the emerging web3 gaming market.
Despite these challenges, the metaverse sector continues to grow and evolve. The strategies adopted by companies like Improbable and Keywords Studios are instrumental in shaping the future landscape of gaming and virtual experiences. The potential of the metaverse and decentralized web remains immense, but the journey to realizing their full potential and the development of associated products will require time and innovation.