Allied acquires majority stake in mobile games developer
Allied Gaming & Entertainment, a prominent player in the esports and poker domain, has strategically acquired a majority stake in the mobile games developer Beijing Lianzhong Zhihe Technology Co., marking a significant move in the rapidly evolving landscape of the mobile gaming industry.
In this transaction, Allied will invest approximately $7.0 million (£5.5 million/€6.4 million) to secure the majority stake from Ourgame International Holdings. Additionally, Allied will gain a controlling interest on the developer’s board, enhancing its oversight and influence within the burgeoning mobile gaming sector.
The acquisition is pending certain closing conditions but is projected to finalize by the end of September 2023.
Founded in April 2022 in Beijing, Zhihe has established itself by developing popular casual games, particularly focusing on card games and Mahjong. The early success of the company is underscored by an impressive revenue of $10.0 million reported during its first nine months of fiscal year 2022.
“We are thrilled to announce our strategic investment in Beijing Lianzhong Zhihe Technology Co.,” stated Yinghua Chen, CEO of Allied. “In just over a year, Zhihe has accomplished impressive milestones within the expansive mobile games market, aligning perfectly with our strategic objectives and the launch of our Allied Mobile Entertainment (AME) subsidiary.”
“Zhihe’s diverse portfolio of engaging mobile games will significantly enhance AME’s market presence, while also creating optimal distribution channels for our current lineup of casual mobile games that are entering the testing and pre-launch phases,” Chen added. “We eagerly anticipate collaborating with their leadership team to unlock future value and realize the synergies between our businesses.”
Comprehensive Growth Plans at Allied
This acquisition announcement coincides with Allied’s release of its second-quarter and first-half financial results, showcasing a robust performance trajectory.
Allied reported a remarkable revenue of $3.3 million for the three months ending June 30, reflecting a staggering 182.3% increase from $1.2 million in the same period last year. For the first half of the fiscal year, revenue reached $4.5 million, marking a substantial growth of 25.0% year-over-year.
Following the announcement of these results, Chen articulated the potential for continued expansion, referencing a significant restructuring initiative undertaken late last year. This overhaul, first detailed in December 2022, included a comprehensive realignment of the company’s esports division and an expansion of its focus to encompass a wider array of entertainment and gaming products and services.
The restructuring initiative has led to the establishment of two new subsidiaries: Allied Mobile Entertainment (AME), which concentrates on the mobile gaming sphere, and Allied Experiential Entertainment (AEE), focusing on live events and experiential entertainment management and consulting.
Moreover, in a strategic rebranding effort, the company transitioned from Allied Esports Entertainment to align with its new, broader vision. As the second full quarter post-restructuring concludes, Allied is poised for significant advancements.
