Koch Media just keeps on expanding. It recently acquired Italian racing specialist Milestone for instance, but it’s also growing both the reach and breadth of its publishing and distribution services – both for its own titles and those of its many partners, with the acquisition of Gaya Entertainment, plus the recent opening of a new office in Poland.
CEO Klemens Kundratitz explained to MCV@gamescom the thinking behind the acquisition of Gaya, a German merchandise producer and distributor with 29 employees, which has more than a decade of experience in the gaming sector.
“It’s an interesting step for us, that we can compliment our video games offering to retail with game merchandise. We have long-standing relationships with other game merchandise companies, like Rubber Road and they will continue as before, but also having a merchandise offering in our own house, enables us to offer our publishing partners a route to that segment of the market, not only manufacturing and distributing games but also help them on the game merchandise side.”
In a statement, Koch noted that Gaya’s web shops and exhibition sales have increased their annual turnover from 3.9m euros in 2017 (￡3.53m) to 6.3m euros in 2018 (￡5.71m).
“It’s becoming clearer when we talk about ‘we can be an all-physical solution’ that means global reach to retail, that means not only games but everything around games,” Kundratitz said. And with this increase in breadth comes another increase in the reach of its services.
“While other people think you don’t need to be locally represented because of the digital dissemination of games, we believe that it’s absolutely vital to be there.”
At the beginning of the month it announced a new regional office in Poland and Kundratitz explained to us the key rationale behind that move: “We believe you need to be close to the market, you need to be there in order to be effective. And while other people think you don’t need to be locally represented because of the digital dissemination of games, we believe that it’s absolutely vital to be there.”
More specifically on the Poland office he expanded: “For us, Poland was a missing piece in the jigsaw of Europe, to truly offer a pan-European publishing service, not only to our own studios but also our business partners. Poland has a very robust and growing economy, it has a large player base, a vibrant PC business, as well as a console business.
“Building our Polish business up was a strategic step for us, and I think it also shows our dedication to our partners and to the industry that we are committed to our strategy of local representation, despite some markets having a decline of the physical business it doesn’t stop us needing local representation,” Kundratitz stressed.
He noted that this is just one part of “a general growth strategy,” with a similar move into Australia in February, with the acquisition of distributor 18Point2.
Finally, we had to ask about the expansion of its development teams with Milestone, to which Kundratitz suggested it will be business as usual at the developer.
“It’s a good studio, it’s a business that has a leading position in the racing niche. THQ Nordic Group has an active M&A agenda for companies that are well managed, on solid ground business-wise and sharing our larger company strategies, and that was the case with Milestone.
“We feel the company is very well run and we don’t really see the need to change it, it’s really unlocking potential that’s the name of the game. I think there’s growth potential in many areas. Being a larger company you have a larger network of business partners and further reach than if you are smaller.
We wonder whether Milestone’s titles will now come through Koch’s own distribution channels, but surprisingly that’s not the case: “The publishing stays as it is, they have different distribution partners in different countries and it’s down to Milestone to decide whether they want to change anything or leave it as it is,” he finished.