21st Century Fox is getting into the mobile videogame business, acquiring a company that is currently working on an adaptation of the movie "Avatar."
Fox is purchasing the game studio Aftershock, which has about 80 employees at offices in Los Angeles and San Francisco, the companies said. The deal is valued in the tens of millions, according to a person with knowledge of the purchase.
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Aftershock was earlier this year spun out of the mobile gaming company Kabam Inc. after its other assets were bought by Korean company NetMarble.
Aftershock is becoming part of a new unit created by Fox in January called FoxNext that focuses on videogames, virtual and augmented reality and location-based entertainment. Like other Hollywood studios, Fox had struggled to determine which of its divisions should oversee efforts in these emerging businesses. Fox ended up creating this new unit that reports to both the head of television, Peter Rice, and head of film, Stacey Snider.
"We think the mobile space is interesting because you've seen businesses grow to supersize very quickly and there are not many segments of entertainment in which you can do that," said Mr. Rice in an interview.
Hollywood studios have over the past two decades swung back and forth on whether they should produce videogames themselves in order to maintain quality and reap the profits or license them to other companies that have more expertise.
Fox itself has built and exited two game businesses since 2000. Walt Disney Co. last year killed its console videogame publishing business after spending hundreds of millions on it.
Comcast Corp.'s Universal Pictures recently hired new executives to spearhead a move into mobile game publishing.
Aftershock was already working on an "Avatar" online mobile game since last year and will look to adapt other film and TV properties from the studio, as well as to create original properties.
"We want fans to experience our intellectual property 12 months of the year and Aftershock is a way to jump-start that process," said Ms. Snider.
Fox is currently working on four film sequels to "Avatar," the first of which is scheduled for release in 2020, 11 years after the original, which earned a record $2.7 billion world-wide.
FoxNext will look to build out Aftershock while also making other investments and acquisitions in digital businesses, said Mr. Rice and Ms. Snider.
Fox and News Corp, parent of The Wall Street Journal, share common ownership.
Write to Ben Fritz at email@example.com
(END) Dow Jones Newswires
June 07, 2017 02:47 ET (06:47 GMT)