Gears of War: Ultimate Edition developer Splash Damage has been bought by a Chinese poultry company.
Paul Wedgwood agreed to sell the company to Radius Maximus, a subsidiary of Leyou Technologies Holdings Limited, which is originally a poultry company. Leyou provided a long statement as to why they decided to make the leap into the video games industry.
According to the annual report for the year ended 31 December 2015 (the “2015 Annual Report”), the Group continues to face an arduous task in respect of the Poultry Business, where, despite efforts to improve raw materials procurement, feed production, breeder and broiler breeding, broiler slaughtering and process, quality and safety management and sales mix rationalisation and channel expansion, the management of the Group still has limited control of the business results and profitability under the harsh operational environment in the PRC. The 2015 Annual Report also stated that the global market for video games industry continued to experience healthy growth despite a slowing world economy.
Splash Damage isn’t the only video game company under Leyou’s belt, since they also bought Warframe developer Digital Extremes just a few months ago.
The entrance into the Video Gaming Business enabled the Group (i) to diversify its business and mitigate the volatile and cyclical nature of the Poultry Business; and (ii) to enhance its profitability. For the year ended 31 December 2015, despite approximately 80% of the revenue of the Group was generated from the Poultry Business, approximately 70% of the gross profit of the Group was generated from the Video Gaming Business.
Well, we’ll just have to wait and see if this will benefit Splash Damage or harm it.