Little-known online games company Trion Worlds, after raising $100 million in venture capital since 2007, is looking at becoming the newest debutante at the digital media IPO ball. Not unlike larger and better-known games company Zynga, which filed for an IPO of up to $1 billion in July, Trion is considering an initial public offering as an option.
"As we build scale and become more profitable, (an IPO) is clearly on our horizon at some point," Chief Executive Lars Buttler said in an interview with Reuters, declining to provide details on a time frame. "We've had a lot of bankers coming to us recently. We keep all of our options open at this point. We definitely have enough substance and enough skill to be a public company at the right time." However, Buttler was quick to note that Trion, which scored a hit with its first game, "Rift," has not yet hired investment bankers. He added that challenging market conditions have made it difficult for companies to go public at the moment.
While Trion may not be a household name, its backers are include two of the best-known companies in media: Time Warner Inc and Comcast Corp. Other investors in the company include Fidelity Investments and ACT II Capital, a hedge fund that invests in media companies.
Trion, which is only about five years old, is growing fast. The company doubled its staff to 500 people this year and Buttler said that hiring pace will continue. Trion has offices outside of San Francisco, and in San Diego and in Austin, Texas. It is also looking at opening studios in Montreal or Vancouver. Trion has differentiated itself from its competitors by betting big on the idea that the future of video games is in sophisticated online universes teeming with thousands of players, and not on video game consoles like PlayStation or Xbox.
So far, the wager has paid off. "Rift," the fantasy-themed game that Trion released in March, sold 1 million copies in just four months. Buttler called the game, which costs $50 plus an additional $15 per month, an instant hit. "Rift is vastly profitable. It is profitable every single week and every single month," Buttler said without giving specific numbers.
While the sale of console games has faltered, online games have become one the fastest growing areas of the video game industry. Research firm DFC Intelligence estimates it is a $18 billion global market. So-called massive multiplayer games such as "Rift" allow thousands of people to play simultaneously over the Internet. The game has won several industry awards, drawing comparisons to Activision Blizzard Inc's "World of Warcraft," a massive multiplayer game with more than 12 million players and $1 billion in annual revenue.
For Trion, however, games are just the start. Buttler said the company is working on a technology platform code-named "Red Door" that will run online games made by developers at other companies. The platform. in which Trion has invested tens of millions of dollars, would provide the software and other tools to companies looking to make games not based on consoles.
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