Fandom Inc., an entertainment company focusing on content about gaming, comic books, movies and TV shows, has acquired Focus Multimedia Ltd., the retailer behind Fanatical, an e-commerce platform that sells digital games, ebooks and other products related to gaming.
The deal is the latest instance of a digital media company trying to both sell products directly to consumers and better lure marketers pursuing the same customers for the same purpose.
Financial terms of the deal, which was financed with a mix of cash and stock, were not disclosed. U. K-based Focus Multimedia also owns a business geared toward products that help people learn how to drive, which will remain with the selling shareholders.
San Francisco-based Fandom, which was originally known as Wikia, was acquired in 2018 by Integrated Media Co., an internet-media investment business backed by private-equity firm TPG and led by longtime digital media veteran and former News Corp executive
The deal at the time valued Fandom at more than $200 million, according to a person familiar with the matter.
Fandom, which is profitable, expects to generate $200 million in revenue this year, according to people familiar with the matter. That would continue the business’s trajectory of increasing revenue between 40% and 60% every year since its acquisition by Integrated Media, the people said.
Founded in 1995 as a distributor of games by mail, Focus Multimedia launched the business that became Fanatical in 2012. Fanatical now offers a catalog of more than 8,000 digital games, ebooks and e-learning courses from more than 1,000 publishers and developers.
This background in getting people to pay for games and other products will accelerate Fandom’s own efforts in building direct-to-consumer commerce revenue streams, said Perkins Miller, chief executive of Fandom.
Fandom says it has 150 million users who come to Fandom.com every month to check out its gaming content, which includes information on games and characters as well as tips and cheats for players. Its gaming-centric email newsletter, which was launched in the fourth quarter of 2020, has more than 1 million subscribers and is on pace to reach 3 million subscribers by the end of the year, according to the company.
Adding a commerce element through Fanatical lets Fandom sell games and related merchandise to users who have shown an interest in them, according to executives.
“The idea is to close the loop from fan interest to a transaction,” Mr. Miller, Fandom’s CEO, said.
“Even more interesting is bringing them back around again,” added Stephanie Fried, chief marketing officer for Fandom. “Part of the value of Fandom is helping people love the things they love more. But once they buy that game…we can help them discover the next game and drive them down the funnel again to purchase.”
Digital media companies have been working to diversify their revenue as
have vacuumed up an ever-increasing share of digital ad spend.
“In the current environment, there is a lot of power in having a deeply engaged audience,” said Andrew Lipsman, a principal analyst at research firm eMarketer. “The past era of digital monetization was all about scale—riding Facebook and Google to increase the size of the audience, but a lot of that audience was a mile wide and an inch deep. The pendulum is swinging from scale to depth of engagement.”
Fandom itself has existing paid revenue streams with commerce and subscriptions through D&D Beyond, a provider of digital tools and retailer of the massively popular tabletop role-playing game Dungeons & Dragons.
Fandom aims to have its revenue streams evenly split between advertising, commerce transactions and subscriptions within the next two to three years, according to its CEO.
Focus Multimedia is Fandom’s third acquisition since being bought by Integrated Media. The company is looking at more deals, particularly around creator-centric businesses in video and audio, Mr. Miller said.
“We believe there’s more we can do to superserve fans,” he said.
Write to Sahil Patel at [email protected]
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