DoubleU Games acquires Paxie Games to expand into thriving Merge-2 market

DoubleU Games Co., Ltd., a prominent developer of social casino games, has announced its acquisition of Turkish game studio Paxie Games, a leading name in the rapidly growing Merge-2 genre. The deal, valued at up to $67 million, reflects a strategic effort by DoubleU Games to diversify its portfolio and enter one of the most lucrative segments in mobile gaming.

The acquisition includes an upfront payment of $27 million for a 60% stake, with the remaining 40% to be acquired over three years, contingent on Paxie Games achieving specific performance milestones. This transaction, expected to close in the first quarter of 2025, will be funded through a combination of treasury shares and cash.

Tapping Into the Booming Merge-2 Genre

The Merge-2 genre, characterized by its blend of puzzle-solving mechanics and thematic elements such as fashion makeovers, has emerged as one of the fastest-growing segments in mobile gaming. Paxie Games’ flagship title, Merge Studio: Fashion Makeover, exemplifies this trend, combining character makeover gameplay with intuitive Merge-2 puzzles. As of November 2024, the game has surpassed 25 million downloads globally, cementing its position as a top-tier player in the genre, according to SensorTower.

DoubleU Games’ leadership highlighted the significant potential of this acquisition, emphasizing Paxie Games’ innovative approach to gameplay and LiveOps events, which are instrumental in driving extended user engagement and monetization.

“We view Paxie Games’ competitive edge as its ability to seamlessly integrate core gameplay mechanics with engaging meta features, creating a rewarding experience for players,” noted Jay Choi, Chief Financial Officer of DoubleU Games.

The Rise of Turkey as a Gaming Hub

Turkey’s gaming industry has garnered global attention in recent years, becoming a hotspot for innovative game development. Major acquisitions, such as Zynga’s purchase of Peak Games for $1.8 billion in 2020, have spotlighted the country’s potential. Other Turkish studios, like Dream Games, have also achieved global acclaim, as seen with their success in titles like Royal Match.

Founded in Istanbul in 2021 by Direnç Çelik, Hüseyin Anıl Özmen, Refik Anıl Bulut, and Sarenur Başel, Paxie Games represents the new wave of Turkish game studios creating globally appealing content. Their expertise in crafting games with strong appeal to female audiences aligns well with DoubleU Games’ vision to broaden its reach.

Strategic Synergies and Future Growth

DoubleU Games plans to leverage its established marketing network, particularly in the United States, to drive the growth of Paxie Games’ titles. This move marks the first time DoubleU Games’ products will be accessible to players in South Korea, a significant milestone as the company currently generates all its revenue from international markets.

The synergy between Paxie Games’ development capabilities and DoubleU Games’ financial resources is expected to foster innovation and scale. The acquisition positions DoubleU Games to capitalize on high-return-on-ad-spend (ROAS) opportunities and short payback periods in the mobile gaming sector.

Industry Insights and Expert Perspectives

This acquisition reflects broader trends in the gaming industry, where consolidation and strategic partnerships are key drivers of growth. Experts believe DoubleU Games’ move aligns with its ambition to secure a diversified portfolio and enter high-growth markets.

“This collaboration signals a strategic alignment of strengths. Paxie Games brings exceptional creativity and development expertise, while DoubleU Games provides the marketing muscle needed to scale globally,” remarked an industry analyst familiar with the deal.

Legal and Advisory Support

The transaction was facilitated by Arma Capital, an Istanbul-based M&A advisory firm, with legal counsel provided by BASEAK.

Looking Ahead

With this acquisition, DoubleU Games is poised to solidify its position as a global leader in mobile gaming, driving innovation in the Merge-2 genre and beyond. The combined strengths of the two companies are expected to unlock new opportunities, delivering value to both players and stakeholders.