DoubleU Games acquires Turkish studio Paxie Games, One of the Top 5 Companies in Fast-Growing Merge 2 Genre

Expanding into new portfolio of makeover / Merge-2 genre with high ROAS and short payback period
Entering one of the largest and fastest-growing mobile game genres
Acquisition of Paxie Games for up to $67.0 million (Upfront $27.0 million and Earn-out up to $40.0 million depending on the performance), expected to leverage DoubleU Games’ marketing capabilities to scale growth effectively

DoubleU Games acquires Turkish studio Paxie Games, One of the Top 5 Companies in Fast-Growing Merge 2 Genre

DoubleU Games Co., Ltd. (192080:KS), a leading developer of social casino games, has entered into an agreement to acquire Turkish gaming studio Paxie Games, developer of Merge Studio: Fashion Makeover. DoubleU Games will acquire a 60% stake for $27.0 million at closing, with the remaining 40% to be acquired over a span of three years, subject to achieving certain financial targets, resulting in full ownership by the end of third year. The acquisition will be financed through a combination of treasury shares and cash. The deal is expected to close in Q1’25.

The acquisition of Paxie Games marks DoubleU Games’ strategic entrance into the rapidly growing Merge-2 market. The transaction is expected to add a meaningful growth and synergy to DoubleU Games, with Paxie Games achieving significant cumulative downloads and revenue and consistently ranking in the Top 5 within the Merge-2-genre, based on Sensortower. Notably, this acquisition will also mark the first time that DoubleU Games’ acclaimed titles are playable in Korea, - a significant milestone for DoubleU Games, which currently derives 100% revenue from international market.

“We believe the acquisition of Paxie Games represents a significant move to secure an expanded portfolio of new mobile gaming titles, driving growth and unlocking new opportunities,” said Jay Choi, Chief Financial Officer.

“We recognize Paxie Games' competitive edge lies in users’ extended playtime with intuitive gameplay, instant rewards and seamless integration between meta and core game mechanics. Additionally, its operational capabilities are enhanced by execution of diverse and creative LiveOps events.”

“We are thrilled about the incredible opportunities ahead for our company. Merge Studio, our rapidly scaling hit game, is only the beginning. Through our full-scale collaboration with DoubleU Games, we are set to achieve even greater growth by expanding our portfolio with exciting new games, reaching a broader audience, and further growing our business.

By leveraging DoubleU Games’ established marketing network in the U.S., we plan to drive substantial growth and expand our reach. Together, the combined expertise of Paxie Games in game development and DoubleU Games’ financial strength will pave the way for mutual success and groundbreaking innovation in the gaming industry,” said Direnç Çelik, CEO of Paxie Games.

Arma Capital, an Istanbul based M&A advisory firm, has provided financial advisory services to DoubleU Games in this transaction. Legal advisory services were provided by BASEAK for DoubleU Games.

About Mobile Game Industry in Turkiye

The Turkiye game industry is characterized by high concentration of small and medium sized gaming studios, and has become a globally renowned hub for both new and established mobile gaming studios.

Recent active M&A activities in the Turkish gaming market underscore Turkiye’s significant role in the global mobile gaming market. A notable example is Zynga's acquisition of Turkish game developer Peak Games for $1.8 billion in 2020. Peak Games is renowned for its popular casual games, Toon Blast and Toy Blast, and this acquisition played a significant role in strengthening Zynga's position in the casual gaming market.

Turkish game developers have recently demonstrated their exceptional development capabilities by producing numerous global hit titles. Dream Games stands out as a prime example, garnering worldwide popularity with its global hit Royal Match.

About Paxie Games

Founded in 2021 by Direnç Çelik, Hüseyin An?l Özmen, Refik An?l Bulut and Sarenur Ba?el, Paxie Games is headquartered in Istanbul, Turkiye. Its flagship title, Merge Studio: Fashion Makeover, successfully integrates character makeover gameplay with Merge-2 puzzle-solving mechanics, catering a wide audience, particularly appealing to the female audience. As of November 2024, the game has achieved over 25 million in cumulative downloads, based on Sensortower. Other live titles include Tile Star and Mahjong Infinity.

About DoubleU Games

DoubleU Games Co., Ltd. is a Korean social casino game development company. The company was founded in 2012 and listed on the KOSPI in 2019. DoubleU Games develops and services competitive mobile games globally and acquired DoubleDown Interactive Co., Ltd.’s in 2017, holding a strong position in the global social casino market.