takes a minority stake in AGBO, the production company co-founded by “Avengers: Endgame” directors Joe and Anthony Russo, the two sides said Wednesday, giving the game developer a foothold in the hunt for Hollywood content companies.
Tokyo-based Nexon said it would invest $ 400 million for a 38% stake in AGBO, which has produced Netflix Inc.
hit “Extraction” and has several film and TV projects under development at streaming services.
The transaction is valued at $ 1.1 billion by AGBO, and AGBO has the opportunity to request an additional $ 100 million from Nexon in the first half of 2022.
The agreement does not require either company to produce films or games using the other’s intellectual property, but executives from both said they would look for opportunities to work together. Nexon will have two seats on AGBO’s board, but Russos and their executives will continue to own a majority stake in the company and control the board.
AGBO is the latest independent production company to benefit from a wave of funding that shows how the streaming era has dissolved funding limits for entertainment seeking a global audience. Through the agreement, Nexon games and properties could be adapted to AGBO film and television projects. The two companies hope to repeat the success the Russo brothers had in franchise adjustments at Walt Disney Co.
‘s Marvel Studios, signaling Hollywood’s continued focus on blockbuster entertainment, selling tickets, toys and more.
The deal follows a series of investments that take advantage of an increase in production driven by Wall Street’s embrace of streaming services at large studios and at technology giants like Apple Inc.
and Amazon.com Inc.
Last summer, Reese Witherspoon’s Hello Sunshine was sold to a company backed by Blackstone Inc.,
a feature that effectively put a “for sale” sign in front of similar devices.
Since then, the children’s entertainment company Moonbug Entertainment Ltd. has been acquired by the same Blackstone-backed company that this week also bought a 10% stake in actor Will Smith’s Westbrook Inc. for about $ 60 million. SpringHill Co., the entertainment company co-founded by basketball phenomenon LeBron James, relieved a stake in October. Similar agreements are expected to follow, say investors and production company executives.
Some of Nexon’s brands are relatively unknown in the United States, but popular across parts of Asia with games including “Dungeon & Fighter” and “MapleStory.” The company focuses on games and immersive worlds that can take years to explore, said CEO Owen Mahoney.
The company’s expansion into film and television follows the hiring of Nick van Dyk, a former director of Disney’s corporate strategy department and head of the film and television division at Activision Blizzard Studios. Mr. van Dyk runs Nexon Film and Television.
AGBO, which Russos co-founded in 2017 with Mike Larocca, has had a mixed record with some releases, such as the action thriller “21 Bridges” and the war drama “Cherry”. Its list of upcoming projects includes several of the big-budget action movies Netflix and other services produce to compete with the big screen, such as “The Gray Man” starring Ryan Gosling as a rogue CIA agent.
A spokeswoman for privately owned AGBO declined to provide detailed financial results for the study. The company was profitable in 2021, according to a person familiar with the matter, and the total budgets for its productions approached $ 1 billion within the past year.
Despite co-directing one of the most lucrative cinema releases ever, “Avengers: Endgame,” Joe Russo said it made more sense to join a video game company after observing the tastes of his four children , all under 25 years. “A movie theater is not necessarily the primary source of entertainment for them,” he said.
Nexon last summer signed a potential deal on tuna tartare and salad at the Hotel Bel-Air in Los Angeles, according to people involved in the deal. AGBO’s CEO Jason Bergsman met with Mr van Dyk and discussed their common interests, including building immersive fictional worlds and using technology such as Epic Games Inc.’s Unreal Engine. In September, Nexon slammed AGBO for an investment, which AGBO referred to an investment bank that was in discussions with several potential investors on its behalf.
“It became clear that our companies have a similar mindset about the future of franchise entertainment, which offers a good potential for us to work together,” Mr Bergsman said.
The agreement does not guarantee Nexon rights to acquire a majority stake in AGBO, according to a person familiar with the matter.
AGBO plans to use some of the capital from Nexon to develop new film and television franchises, Mr Bergsman said. The money will enable AGBO to own a larger stake in some of its productions, especially some planned for cinema release and potential video games, he said.
Write to Erich Schwartzel at firstname.lastname@example.org and Benjamin Mullin at Benjamin.Mullin@wsj.com
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