“Straight indie publishing, signing games, publishing them. It will end, it won’t make it over time.” – Zordix on the future of games publishing

Zordix is the latest name to come to prominence from the increasingly ambitious Swedish games industry. Building out from a racing developer and publisher, the now listed Zordix Group has serious investment behind it and has now acquired four further games businesses.

Most notable of those were UK indie publisher Merge Games and French publisher and distributor Just for Games. Alongside Hungary’s Invictus, also known largely for racing titles and indie developer Dimfrost Studio, the group now covers all the key industry sectors.

So what are its plans for the future and how is it looking to synergise its various aspects into something greater than its already successful parts? We sit down with Zordix CEO Matti Larsson, Merge MD Luke Keighran and Just For Games CEO Philippe Cohen to find out.

MADE IN SWEDEN

While many complain that the UK markets have been shy of backing games companies, the same can certainly not be said of Sweden’s markets of late. With the money made from the likes of Spotify looking for new opportunities.

Zordix’s Larsson expands: “Sweden is financially strong, with gaming superpowers including developers and publishers. So it’s a perfect foundation to build a larger group. Especially with our listing in the financial markets, as the financial families in Sweden have started to invest a lot in gaming.”

Of course not just anyone can rock up and get a listing, Larsson fills us in on Zordix’s backstory:  “I started Zordix ten years ago to make console games. Our vision was to take our simulation technology, based on university research and our local all-terrain vehicle community here in the north of Sweden, to a global market. So we started self publishing and building our own brands. And following our initial success, I was able to list the company on the stock exchange.”

That opened up Zordix’s ambitions, which resulted in Just For Games and Merge coming under its wing. Although that may not be the right term, as the group is keen to grow by finding successful businesses and investing in them to fly higher, not providing them with any kind of shelter. With Merge’s Keighran being clear on the strength of each element’s underlying strength.

“We’ve shown that with our commercial acumen [Merge is] very good at taking independent games global.” And with a lineup that includes Spirit of the North, Cloudpunk, the retail versions of Dead Cells, plus many more and a wide range of upcoming owned IPs, that’s been proven.

Cohen comes in to describe the background of Just for Games, one of the top three distributors in France, dealing with big franchises from some of the biggest publishers.

“We set up Just for Games to lead the value segment and then we grew on this success with premium distribution and then gaming accessories,” Cohen tells us. “Then we started our own publishing strategy, and then our own game strategy as well. So we build the company stone-by-stone, step-by-step, and each time, we’re reinvesting the profit we make, exploring new segments of the market.”

All three companies have demonstrated an ability to grow and diversify then and that’s set to continue under their partnership, says Keighran: “So this group has been created in order to go on a journey, to start acquiring like minded people in different areas in order to actually complement the whole group. And of course, this is just the start of the opportunity.”

STATUS GROW

Larsson sets out where Zordix is looking to make further acquisitions. “We’re now six offices in four different countries. We have game development, distribution, publishing, and then we are spreading geographically so we’ll be in all channels, in all geographies, on all the platforms.

“We’re especially searching for companies that can complement each other and support each other… to make organic as well as intelligent acquisitions. We’re a super friendly and approachable group that wants to expand on our experiences. We’re especially looking for game developers and interesting IP.

“Now we have a better network than before,” he adds, “we’re looking for like minded entrepreneurs in gaming. Super entrepreneurs, like Philippe [Cohen] and Luke [Keighran], who have been expanding their businesses by 30 per cent year-
on-year.

“They are expanding, and have been for years, with excellent market plans in their areas. So having such people on board is like a dream come true for me. I started my own publishing a couple of years ago, Zordix publishing, but now to have the real thing, so to speak, is like a dream come true.”

Cohen picks up on that idea of growth. “What is very important is that after ten years of growth and success I had a strong feeling that we needed a platform to act globally.”

To which Larsson adds: “It’s expanding from what we have been doing to a much higher level, which is fantastic. And we’re just at the beginning of the journey, it’s still early on. You’ll hear a lot more about us as we continue to grow.

“While there’s organic growth, it’s also together that we can acquire games and IPs and grow. We can identify games that are breaking through so we can grab them and have them join the group and build our own IP portfolio together. In the long run, IPs can even be licenced for different things, like books etc.”

BRANDING IRON

While Zordix will become a more familiar name, the companies it takes on will retain their own brands, their own specialties, and their own independence to make decisions.

“We each have our own strengths,” notes Keighran. “Merge has a great strength in terms of actually picking up games. This is not what Philippe [Cohen] does, this is not what Matti [Larsson] does, they leave me to my own devices to do that.

“Though at the same time Philippe helps me with distribution in the French market. I help him in the UK. So they complement the strategy, when Philippe develops the strategy around his casual games or family games then we’ll help him with that, to expedite that growth through our distribution networks.

“And then on the flip side, we’ve spent all morning actually brainstorming across eight people internally, what we’re going to do with Smalland,” the upcoming survival title. “It has a massive [Steam] wishlist in place and it’ll probably be the first internally launched IP for the group when it comes out.”

Elsewhere in the group Zordix continues to develop off-road racing titles, along with the upcoming Bramble from developer Dimfrost, while Just for Games has its Fantasy Friends IP

“So all of a sudden we’re actually not just distribution, we’re also generating content as well,” Keighran notes. “And that’s really important for us in the longer term, to actually facilitate content growth across the group.

At present the group’s activities are largely focused around discrete console and PC titles, whether that be single or multiplayer content, rather than ongoing games as a service. However, Larsson is keen to expand with the right partner.

“As we go down the line we’ll probably move into some new business areas, such as mobile and games as a service, VR/AR etc. But for that we need an entrepreneur to come on board with that experience. So if we do an acquisition like that, it could be huge, we could double the size of the group and double it again, no problem, but we need it to be a really good entrepreneur.

“That’s the philosophy, it’s very likely that we will go into new business areas along the way. But at the moment, we’re focusing on console and PC, and that simplifies it, because we can make sure that we cover the geographies, the platforms, the knowledge.”

“It kind of snowballs, adds Cohen. “You bring one company in, which brings another company in, and et cetera, et cetera. So, everybody can contribute to the journey, and each company brings its own network.

“Again, we are different, we are acting independently. We are seeing different market segments, we have different expertise, and skills, but on the other hand, we all look in the same direction and this is very important for the future. We’re trying to build something strong, sustainable for the future, all together. That’s the reason why I was very excited to join and excited for the next steps.”

PUBLISHING NEXT

While the future for games businesses such as these is an exciting place of opportunity, they will need to stay agile to continue to thrive, notes Merge’s Keighran.

“Straight indie publishing, signing games, publishing them. It will end, it won’t make it over time. There is a job to do internally, where we’re strategizing now, to say, OK how do we build our franchises – the Smallands of the world, where we own the IP? We’ve got another game Monster Harvest, we’ve got loads of really strong games as a service behind that. They become franchises.

“Your average indie publisher won’t make it,” Keighran reinforces. “I think it’s something like 750 indie publishers now. So the question is, how many are going to survive in the next five years… Some will make it for sure. For some it’s a bit flash in the pan. How much of it is sustainable? There’s question marks across all of that.

“And it’s so important for us strategically as a company that we’re thinking more about ‘who are the good developers to work with for us’. Establishing long term relationships with those content providers, then it becomes a very viable, sustainable, long term business for Merge Games.

“We’re thinking about things from a publishing perspective, for the next 12 to 24 months, but there is also a strategy in place to actually go, what’s the future? Matti and Philippe will tell you: content is king, always has been key in this industry. And it’s so important that we’re working with those key partners and that we’re really strong in those niches which we feel that we’re strong in.

“We’re already running successful businesses. So we’re thinking, how do we build that out? How do we look for the pitfalls that are in the marketplace? What can we do? Because I know for one, and Philippe will be another, we want to be long term, we don’t want to be short term.

With the market changing rapidly, with subscription services and the power of platforms growing, it’s easy to see why Zordix is looking to invest in IPs. Then it can use its broad networks and understanding of the current market to build on those and bring the group as a whole forward into the next evolution of the gaming space.

The group is now looking both for more entrepreneurial kindred spirits to further grow its access to markets and also to game developers and IP holders, Larsson tells us, who it can work in partnership with to do more than simply bring those games to market.