Pivotal Games rescued by £2.36 million SCi buyout

Bath-based development studio Pivotal Games has been purchased by British publisher SCi following the collapse of its parent company, Kaboom Studios, earlier this month.

The deal will see SCi, which already owned 10 per cent of Pivotal, acquiring the remainder of the studio from Kaboom's receivers, Ernst & Young, for the sum of £2.36 million in cash.

The deal is a good one for SCi, which has seen significant success in the past two years thanks to games from Pivotal such as the Conflict Desert Storm series (the second of which is currently topping the UK charts) and The Great Escape.

Pivotal had a turnover of £2.4 million and a pre-tax profit of £0.28 million in the last set of audited accounts available for the studio (the year ended Dec 31st 2002), which makes SCi's purchase price seem like a bargain - with the publisher expecting that its new financial relationship with the developer in respect of royalty payments will compensate it for the purchase price within the next 12 months.

This is the first time that SCi has purchased a studio and brought development in-house in this way, and the company is keen to stress that this is an exceptional circumstance, with the purchase made in order to safeguard valuable future product from Pivotal rather than indicating a shift in its development policy.

The company plans to continue to operate Pivotal, which employs some 70 development staff, as an independent studio. The developer will have independent management, and payments will continue to be made strictly based on results - effectively allowing SCi to continue its outsourcing model despite the fact that it now owns the studio outright.