Video game

Russo Bros. ‘ AGBO sells 38% stake to video game company Nexon for $ 400 million in virtual worlds embrace – deadline


AGBO, the production entity founded in 2017 by filmmakers Joe and Anthony Russo with Mike Larocca, has sold a large minority stake to video game maker Nexon for $ 400 million.

Nexon, an Asia-based company with a fledgling Los Angeles film and television division headed by Disney alumnus Nick van Dyk, has also pledged to invest an additional $ 100 million in the first half of 2022 if AGBO asks it to do so. The transaction gives Nexon a 38% position, making it the largest shareholder in AGBO, which is now valued at $ 1.1 billion. Nexon will also gain two board seats, for van Dyk and Tim Connors, a former Marvel executive who arrived at the games company last month in a senior studio role.

The Russos are responsible for several of the highest grossing films ever to be released, an elite list topped by Avengers: Endgame in 2019. The Ohio-born duo have explored a wide range of stories as producers, writers and directors since reaching the pinnacle of studio blockbuster. They created AGBO, partnering with many of their Marvel collaborators, as a home for a more diverse range of work. Their projects took root outside the studio system, with an action movie Extraction on Netflix and the Iraq War Drama Cherry for Apple TV +. They’ve also teamed up with NBCUniversal, Disney, A24, and Roku. Two of their upcoming projects have a penchant for espionage – Citadel, a series for Amazon Prime Video, and The gray man for Netflix, the latter of which they co-direct. With a budget of over $ 200 million, The gray man was the streaming giant’s most expensive film when it got the nod in 2020.

Chinese film studio Huayi Brothers, which initially backed AGBO in its first phase, will remain invested, but at a single-digit share percentage and no board seat, according to insiders.

Van Dyk launched the Los Angeles-based division of Nexon earlier this year, as Deadline was the first to report it. Founded in 1994 in South Korea, Nexon is today based in Tokyo and listed on the Tokyo Stock Exchange. The company has a market value of nearly $ 18 billion.

The arrangement is positioned as a win-win revolving around a hot sector: the metaverse and virtual worlds. Joe Russo described the setup as a “swing door that can go both ways” meaning that AGBO could develop movies or series from Nexon’s treasure trove of game titles, and Nexon can also create games. game and virtual world expansions based on AGBO titles. Van Dyk said the company was in “pole position” for playing opportunities in a virtual first glance situation, which he called a “huge win” for both companies. The relationship’s announcement did not stipulate specific titles or a list, and parties underscored the flexibility and holistic nature of the investment.

“For Joe and I, every project, every idea, wants to have a very unique life,” Anthony Russo said in an interview. “When you’re in a changing technology landscape, we want the freedom to take and shape any idea however it wants to be taken and shaped. That independence is really essential to this process and we were upfront with Nexon and they recognized that right away about us and they realized that was at the heart of our value.

Given the current go-go trading environment and thirst for content, AGBO had held discussions with several parties about its financial and strategic options last year. Over the past year, a series of private equity-backed transactions have brought an influx of funds to companies such as SpringHill by LeBron James, Hello Sunshine by Reese Witherspoon and Jada Pinkett Smith and Westbrook Inc by Will Smith. After Van Dyk arrived at Nexon last summer, he reconnected with Jason Bergsman, CEO of AGBO. The two were colleagues at Disney in the mid-2000s, when van Dyk was part of the corporate strategy and business development group, helping to craft a number of key deals. An initial conversation about Nexon’s potential development of a unique game title deepened into a more substantial strategic exchange, and the deal was concluded in principle later in the fall.

The Russos, in a joint statement in the official announcement, said the new partnership is “based on our shared vision for the future of storytelling and utilizes the unique talents of both companies.”

Although viewed as an emerging company from an American perspective, Nexon is one of the largest and most successful video game companies in the world. Its main franchises include Dungeon and fighter over $ 18 billion in cumulative gross revenues to date; Maple history, played by almost half of South Korea’s population; and KartRider, with over 380 million registered players on PC alone. In 2021, Nexon acquired Stockholm-based Embark Studios, whose new game RCAF Raiders is expected to launch later this year.

Van Dyk highlighted the accomplishments of the Russo Brothers and their associates at AGBO, including Christopher Markus and Stephen McFeely, who are the co-chairs of AGBO’s story. They’ve teamed up to direct and write four Marvel films grossing a total of $ 7 billion at the box office. As the company sets the course for the 2020s and beyond, van Dyk said, “they want to change the way stories are told.” The Russos, he added, “are really thinking about how content is going to look like 10 years from now and how we’re going to tap into these complementary and overlapping human needs to communicate, to have fun, to engage. and compete.

Nexon CEO Owen Mahoney said the two companies are both active in global construction. “The ability to create and maintain successful entertainment franchises in multiple markets for decades is deeply rooted in Nexon’s DNA,” he said. “AGBO and Nexon share a fundamental vision to thrill a global audience with content that spans multiple platforms and markets. “

In an interview, Mahoney acknowledged that previous teams between game companies and traditional film and television production entities had not yielded great creative results. But the emerging field of virtual worlds is at a very early stage, he said, and “can really benefit from deep and creative collaboration around IP that is broad and built to last. These guys are the best at it.

Bergsman said the new funding “will provide AGBO with new resources to innovate and continue to grow as an independent entertainment company run only by creators. As we seek to expand the reach of our storytelling, Nexon’s cutting-edge gaming capabilities, its pioneering work in creating online virtual worlds, and its global footprint make it an ideal strategic partner.

Larocca added that the investment “provides an important accelerator to our founding mission at AGBO – to delight audiences around the world with ambitious stories told in all forms of media.”

PJT Partners was AGBO’s financial advisor and Skadden, Arps, Slate, Meagher & Flom provided legal advice. Loeb & Loeb provided legal advice to Nexon.