Keywords Studios snaps up Mighty Games as gaming firm’s sales jump

Keywords Studios has snapped up AI-based testing technology platform Mighty Games in a deal worth up to AUD$10million (£5.7million).

The group also told investors in an update on Wednesday it had completed the takeover of game development studio Forgotten Empires, which cost it £25.9million.

Keywords’ shares rose on the update, and were up 5.53 per cent or 135.60p to 2,587.60p in late morning trading.  

Bertrand Bodson, chief executive of Keywords, said the acquisition of mobile gaming specialist Mighty Games will enable the firm ‘to offer their impressive automated game testing solutions and expertise to our clients, in line with our strategy to harness technology to do more for our clients and remain at the forefront of our industry’. 

He added: ‘Mighty’s talented game development team further strengthens our game development presence in Melbourne and follows the recent acquisitions of Tantalus and Wicked Witch in Australia.’

Keyworks also posted a strong half-year trading update today, with revenue climbing 34 per cent to around €320million.

Adjusted pre-tax profit for the first half is expected to come in at €54million, an representing a 35 per cent increase against last year and a margin of 17 per cent. 

The group expects group revenue to rise by around 22 per cent amid strong demand for all its services. 

The company is also in the process of relocating some of its staff and existing business in Russia, Sperasoft, to locations including Poland, Serbia, Armenia and Malta. 

Bodson said: ‘Keywords has started the year very strongly, building on the momentum achieved in 2021 as we continue to benefit from a renewed focus on content creation post pandemic and the structural trends towards outsourcing.

‘Whilst we are mindful of a more uncertain macro-economic environment and some volatility in the scheduling of certain projects we continue to see strong demand for our services. 

‘Given this and the Group’s strong performance in H1, we are confident of delivering a performance comfortably ahead of current market expectations for the full year, albeit with organic growth rates moderating and margins moving to historic levels of ~15 per cent as we invest in the business, transition our people and work from Russia, and as more costs return with the easing of Covid restrictions.’