Tokyo-based Nexon said it would invest $400 million for a 38% stake in AGBO, which produced Netflix Inc.’s hit “Extraction” and has several film and TV projects in development on the streaming services.
The transaction values AGBO at $1.1 billion, and AGBO has the option to seek an additional $100 million from Nexon in the first half of 2022.
The agreement does not require either company to produce movies or games using the other’s intellectual property, but executives from both have said they will seek opportunities to work together. Nexon will get two seats on AGBO’s board, but the Russos and their executives will continue to own the majority of the company and control the board.
AGBO is the latest independent production company to benefit from a wave of funding, showing how the era of streaming has dissolved funding boundaries for entertainment that seeks global audiences. Through this deal, Nexon games and properties could be adapted for AGBO film and television projects. Both companies hope to replicate the Russo Brothers’ success in franchise adaptations at Walt Disney Co.’s Marvel Studios, signaling Hollywood’s continued focus on blockbuster entertainment that can sell tickets, toys and more.
The deal follows a series of investments capitalizing on a surge in production driven by Wall Street’s adoption of streaming services at major studios and tech giants such as Apple Inc. and Amazon. com Inc. Last summer, Reese Witherspoon’s Hello Sunshine was sold to a company. backed by Blackstone Inc., a move that effectively placed a “for sale” sign in front of similar entities.
Since then, children’s entertainment company Moonbug Entertainment Ltd. was acquired by the same Blackstone-backed company, which this week also bought a 10% stake in actor Will Smith’s Westbrook Inc. for around $60 million. SpringHill Co., the entertainment company co-founded by basketball phenom LeBron James, unloaded a stake in October. Similar deals are expected to follow, according to investors and production company executives.
Some of Nexon’s brands are relatively unknown in the United States, but popular in parts of Asia with games such as “Dungeon & Fighter” and “MapleStory”. The company is focused on games and immersive worlds that can take years to explore, chief executive Owen Mahoney said.
The company’s expansion into film and television follows the hiring of Nick van Dyk, a former executive in Disney’s corporate strategy division and head of the film and television division at Activision Blizzard Studios. Mr. van Dyk runs Nexon Film and Television.
AGBO, which the Russos co-founded in 2017 with Mike Larocca, has had a mixed track record with some releases, such as action thriller “21 Bridges” and war drama “Cherry.” His slate of upcoming projects includes several of the big-budget action movies Netflix and other services are producing to rival the big screen, like “The Gray Man” starring Ryan Gosling as a rogue law enforcement agent. CIA.
A spokeswoman for private company AGBO declined to provide detailed financial results for the studio. The company was profitable in 2021, according to a person familiar with the matter, and combined budgets for its productions have approached $1 billion over the past year.
Despite co-directing one of the highest-grossing theatrical releases of all time, “Avengers: Endgame,” Joe Russo said joining a video game company made more sense after observing the likes of her four children, all under the age of 25. “A movie theater is not necessarily the main source of entertainment for them,” he said.
Nexon touched on a potential deal last summer over tuna tartare and salad at the Bel-Air Hotel in Los Angeles, according to people involved in the deal. AGBO CEO Jason Bergsman sat down with Mr. van Dyk and discussed their shared interests, including building immersive fictional worlds and using technology such as Epic Games Inc.’s Unreal Engine. In September, Nexon introduced AGBO to an investment, which AGBO referred to an investment bank that was in talks with many potential investors on its behalf.
“It’s become clear that our companies have a similar mindset about the future of franchise entertainment, which has good potential for us to work together,” Bergsman said.
The deal does not secure Nexon’s rights to acquire a majority stake in AGBO, according to a person familiar with the matter.
AGBO plans to use some of Nexon’s capital to develop new film and television franchises, Mr. Bergsman said. The money will allow AGBO to have a bigger stake in some of its productions, especially some that are slated for theatrical release and potentially video games, he said.
This story was published from a news agency feed with no text edits
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