How Scopely's acquisition of FoxNext led to Boundless opportunity

The FoxNext team has been through a lot.

Established in 2017 to be the new video games division for TV and film giant Fox, the studio was sold (along with its entire parent company) to even larger TV and film giant Disney in 2019. Disney had made a very public pivot away from internal game development a few years earlier, so it was not terribly surprising when FoxNext was sold again in January of 2020 to its third (and current) parent company, Scopely.

Speaking with GamesIndustry.biz, Scopely president of games (and former FoxNext GM) Amir Rahimi talks about how the team dealt with the turmoil.

"When I look back at it, it feels like a miracle that we were able to build a game through all of that," Rahimi says. "But this is a very tight-knit group. I think six or seven of us go back about 20 years now. We have a very strong culture, a strong identity, and we've managed to stay focused through all of it.

"Change is nothing new. Change is the only constant for this group. We've been across so many companies so far. The key has been focusing on the people, keeping our people focused and happy, and not letting those shifts in culture or parent companies affect the way we develop games."

It may have been impressive enough to build a game at all under those circumstances, but the title the team built -- Marvel Strike Force -- has been a success by many metrics, particularly since the Scopely acquisition. Marvel Strike Force saw revenue grow 70% year-over-year to $300 million in 2020, and Rahimi notes retention figures showing 70% of users playing for seven days in a row, with the average player putting in more than two hours a day.

The growth doesn't appear to be purely down to the pandemic, either. Scopely chief revenue officer and boardmember Tim O'Brien says that while the onset of COVID-19 spiked metrics in its first few months, things had levelled off by last September, the company's slate of products are stable and growing this year, and it's not expecting any kind of change as vaccines roll out and the pandemic hopefully subsides.

Rahimi notes that games like Marvel Strike Force may be particularly well suited to holding on to any gains from the past year.

"A lot of companies in their approach to M&A are looking to alter the acquisition target in some way, whether it's by tripping up leadership or having them work on a different IP, game, genre or technology stack"

Amir Rahimi

"When someone engages in a game long enough to get into the great social loops that exist, they build relationships that tend to last a very, very long time," he says. "So while the pandemic had the effect of making it more likely for people to build those social connections in games, now that a lot of those social connections have been established, we have a lot of analytic ability to judge what's happening to the audiences. And we're not seeing that type of decline so far now that the world starts opening back up and people are getting the vaccines."

Rahimi also credits much of the recent success of Marvel Strike Force to Scopely, saying the company's technology stack, publishing abilities, and willingness to offer these things without forcing them on the studio are "a model for how mergers and acquisitions should look in this industry." (Scopely is putting that model to the test a lot lately, having also acquired Digit, PierPlay, and Genjoy since 2019.)

"A lot of companies in their approach to M&A are looking to alter the acquisition target in some way, whether it's by tripping up leadership or having them work on a different IP, game, genre or technology stack," Rahimi says. "In my experience that's usually the number one thing where these acquisitions go wrong. But Scopely's approach to M&A with us has been very different; it's been them looking for a partner that brings something to Scopely it didn't already have, and also a partner it can help empower and grow to be successful."

O'Brien adds, "That's been the most important thing about this partnership: not only that we came together and shared the same culture and values around game making, but also that a number of those key FoxNext leaders joined the leadership team here at Scopely."

In addition to Rahimi's executive position at Scopely, FoxNext's Aaron Loeb has become Scopely's chief business officer and O'Brien notes that FoxNext publishing leaders joined Scopely in leadership roles as well.

It's not just the FoxNext developers' job titles that are changing. After a year as part of Scopely, it's time for FoxNext to stop carrying the name of the owner before its previous owner. Going forward, the studio will be branded as "Boundless Entertainment, a Scopely Studio."

"We're really excited about the consolidation that's happening in this industry, and really excited to be leading some of those changes that are happening"

Tim O'Brien

"Part of the reason we chose the name Boundless is that we have this deep-rooted philosophy that great game makers can make great games, regardless of the business model or platform," Rahimi says. "That's something this group has done over the years, and one of the reasons we love Scopely so much and were happy to go with them is they share the same perspective. If they have conviction and passion around a new opportunity, they'll go for it."

And while Scopely is pretty firmly a mobile games company today, O'Brien says the company is working on bringing some of its existing titles to the web and PC, and is greenlighting games he can't talk about yet that are intended to be "full cross-platform."

"Ultimately we want to be where the consumers want to digest and play our games," O'Brien says, adding, "although we still are always going to be excited about mobile and delivering amazing experiences there."

While Rahimi and O'Brien may paint the Scopely-Boundless acquisition as a model for such deals in the industry, it is not a one-size-fits all approach. O'Brien notes that Scopely has made a number of acquisitions in recent years, is planning on making more going forward, and the company plans to be flexible in what it expects from each new pick-up.

"We just want to be a place that can provide and cultivate those types of relationships and then accelerate our businesses together," O'Brien says. "I think through our acquisitions of Genjoy, Digit, Pier Play, and FoxNext, they're all turning into such positive and rewarding experiences that we just want to double-down and partner with more teams and companies. We're really excited about the consolidation that's happening in this industry, and really excited to be leading some of those changes that are happening."