Leading US games publisher buys DemonWare

19 Feb 2007

One of the top-three computer game publishers in the US, Activision, has emerged as the buyer of Irish games software firm DemonWare.

Sources familiar with the deal suggest that the process to buy DemonWare began over six months ago and that it is still not finalised.

No figure for the acquisition is yet available but, based on last year’s acquisition of Irish firm Upstart Games by Chinese media firm Sun Shop for around €11m, the DemonWare deal could exceed €15m.

DemonWare’s technology is used by major games firms like Atari and Ubisoft to enable multiple players to play video games against each other over the internet.

The company’s software has been used in top-selling games like Call of Duty 3, Saint’s Row and Tom Clancy’s Rainbow Six: Vegas and works on platforms like Xbox 360, the Nintendo Wiii and forthcoming PlayStation 3.

The company was formed by Trinity College graduates Dylan Collins, chief executive, and Sean Blanchfield, chief technology officer, in 2002.

When contacted about the acquisition 27 year-old Collins refused to comment.

The deal could yield a handsome return for DemonWare’s original investors who include Enterprise Ireland, Dublin Seed Capital Fund and several private investors, who have ploughed around €1m into the company.

Santa Monica-based Activision recently secured top three publisher in the US across the Sony PlayStation 3, Nintendo Wii and Microsoft Xbox 360 and is the only publisher to rank across three consoles.

In recent days, Activision said it expects to report net revenues of US$822.8m for the third quarter and raised its outlook for fiscal 2007 to come in at US$1.4bn.

Despite this bullish performance, Nasdaq-listed Activision is under the spotlight at the Securities and Exchanges Commission and was last week granted a request for a continued listing subject to filing reports for the last two quarters of 2006.

By John Kennedy