PopReach has a unique risk mitigation strategy to acquire proven game assets and extend their lifespan while maximizing cash flows by offering improved experiences for loyal players. PopReach owns and operates more than 25 games today. The company’s founders Locke and Walsh have a lot of experience in the free-to-play game market.
The company completed two major acquisitions in 2021: Peak – Brain Training from Brainbow in the UK and PAYDAY Crime War from Starbreeze in Sweden. Peak was purchased for 5 million dollars. The Peak app is an award-winning entertainment-based cognitive training app with over 60 million downloads and has provided PopReach with significant cash flow.
PopReach is reviving old games
PopReach buys existing games that already have a loyal player base, unlike companies that invest in developing new games in an industry that is notorious. The games on its radars are suitable for large established audiences and a proven product market.
PopReach targets game acquisitions where the purchase price can be reimbursed from operating cash flows in less than three years and the expected lifetime is at least five years. The company focuses on games ranging from $2 to $10 million, which is too small for traditional game publishers’ other industry consolidators. The competitive environment is quite favorable, as there are no direct competitors for the size of the assets PopReach acquires. In fact, the company has yet to find itself in a competitive bidding situation.
A disciplined acquisition strategy, low-cost operational infrastructure, and a data-driven approach to game optimization are PopReach’s “secret feature”. This business model provides predictable long-term results, reducing risk and facilitating scaling while continuing to generate cash flow positive gaming assets.
When asked if developing original games is a possibility, Walsh is adamant about what makes the company successful. “We’ll be making newer versions of our existing games over time, but I don’t think we’ll ever be in the business of creating a new intellectual property from scratch.”
PopReach will be an important name of the future
The free-to-play market in Asia is actually huge but is mostly not used by Western broadcasters as it is complicated to navigate for cultural and regulatory reasons.
Rob Goff responds optimistically when talking about PopReach’s financial position. “We estimate that approximately 12 million dollars of cash are available for purchases. Given the support shown by the investors behind their strategy, we are also confident that they have full access to the capital markets for additional capital. Investors openly support strong, mature franchise acquisition strategies that have proven they can revitalize franchises and extend their lifecycles.”
Equipped with a solid strategy, purpose-built platform, and managed by industry experts, PopReach is poised for high growth. “The best part of playing games is that the game is constantly growing, whether the economy is developing or the economy is receding. The free-to-play game has proven to be extremely durable, ”says Walsh.
PopReach is only in the beginning. It still has around $12 million in cash to distribute to other deals and M&A connections are quite strong. As Walsh points out, “We are at the fundamental level of the company. There is a tremendous opportunity for us to grow and scale. In my opinion, the next big milestone is $100 million in revenue. In the coming years, we will be using data-driven products to successfully carry out mergers and acquisitions and develop our games organically. I think we will reach this point by continuing to use our approach.”
Source: Financial Post