This will make it the largest pure-play game development company on the Australian Stock Exchange (ASX), and in Australia and SEA too.
With more than 450 employees, the acquisition is projected to generate no less than A$17 million (US$12.36 million or RM51.5 million) revenue per annum.
In-house game design and development
As a refresher, iCandy’s core business is in game development, game publishing, and e-sports, with its titles played by over 360 million mobile gamers worldwide.
Lemon Sky is a CGI art and animation studio that provides outsourced services to clientele including Microsoft Studios, EA Entertainment, Disney, and Nickelodeon.
Back in November 2020, it was announced that Lemon Sky and iCandy were collaborating to create a new gaming company for AAA mobile games.
iCandy’s COO, Desmond Lee, told Vulcan Post that the new company, called Sky Candy, is now an independent studio and focuses on AAA mobile games.
While iCandy is known for publishing mobile game titles, Desmond told us that the acquisition of Lemon Sky will bring the additional expansion of iCandy into the console and PC space.
Prior to this, iCandy hadn’t outsourced any art and animation services from Lemon Sky for its mobile games. But the team has recognised Lemon Sky’s strengths through its animation work for AAA gaming titles such as Overwatch 2, Call of Duty: Infinite Warfare, and SimCity, so this acquisition speaks for itself, according to Desmond.
“Collaborative partnerships in the creative industry are pertinent to keeping things fresh and innovative. We are positive that this merger will encourage creative working methods and bring about new ideas,” said Cheng-Fei Wong, CEO of Lemon Sky.
However, Desmond clarified that there will not be a change in leadership following this acquisition, and Lemon Sky will continue its outsourcing work.
Into the metaverse
Other than increased manpower, revenue, and capabilities, both teams are confident that this acquisition will help the group push towards building the extended metaverse.
Did you know: The metaverse is a digital reality that combines aspects of social media, online gaming, augmented reality (AR), virtual reality (VR), and cryptocurrencies to allow users to interact virtually.
This will be done through both companies’ regional expansion plans in developing casual and AAA gaming on the blockchain for the open metaverse.
Although Desmond wasn’t able to share any teasers on what they have in store to execute this, he did tell us that there are already a few plans in the pipeline.
After all, the development of the open metaverse is still in its nascent stages of conceptualisation and leaves much room to be explored.
“While our current focus is on the gaming community within this new and quickly expanding space, we have our sights on going beyond that to where opportunities present themselves,” Desmond shared.
A huge valuation for the acquisition
According to iCandy’s press release, this acquisition will be at a valuation of A$44.5 million (US$32.4 million or RM135 million). It is expected to be fulfilled together with cash and newly issued iCandy shares.
In parallel to the merger, iCandy has raised A$40 million (US$29.1 million or RM121.2 million) from institutional investors through a placement that’s oversubscribed (where there is a higher demand for shares than the actual supply).
The funding round was led by another gaming company investing in the metaverse, Animoca Brands, a global leader in gamification technology and blockchain gaming.
Animoca Brands also has a portfolio of over 100 investments in NFT-related companies and decentralised projects contributing to building the open metaverse, so it’s likely we’ll be seeing interesting projects emerging from iCandy’s Lemon Sky acquisition soon.
Featured Image Credit: Lemon Sky Studios