iCandy storms into the metaverse with acquisition of 51pc stake in Southeast Asia-based games firm Storms

ASX-listed companies are in a digital land grab, with shares in this video game maker climbing on its latest purchase.

ASX-listed companies are increasingly keen on bitcoin, NFTs, the Metaverse, Defi, DAOs, Stablecoins, Blockchain and more. Picture: Joe Raedle/Getty Images/AFP

Video game maker iCandy is the latest ASX-listed company to enter the metaverse, acquiring a 51 per cent majority stake in Southeast Asia-based games company Storms.

Storms was co-founded and co-owned by three leading Asian telcos including Optus’ parent company Singtel, and the merged company will advance its goal of publishing games in Web 3.0 and the metaverse, according to Storms chief executive David Yun.

The deal is worth $8m in new iCandy shares which will be paid when the agreement becomes unconditional. The shares will be issued at a price of 12.6c, derived from the seven-day volume-weighted average price.

“We recognise many synergies between Storms and iCandy, with Storms making a great complementary addition to iCandy’s horizontally-integrated gaming business model,” Mr Yin said.

“At the same time, this acquisition strengthens Storms’ ability to be a trailblazer in delivering more fun to the gaming community through efficient game development time and at scale.”

Storms was founded in March 2020 and in 2021 posted unaudited revenue of $4.3m, with $7.6m in cash and cash equivalents.

“We are looking forward to partnering with iCandy Interactive as iCandy develops its Metaverse gaming ambition,” said Lim Cheng Cheng, Singtel’s chief corporate officer and chairman of Storms’ board.

“This will further our collective strategy to better serve our respective customers with unique and engaging content”.

The deal is the latest in a string of Asia Pacific-based acquisitions for iCandy, which last month announced an agreement to buy a 60 per cent stake in the Malaysia-based Gameconomy for $500,000, and a deal to buy game art provider Lemon Sky Studios for $44.5m in November.

Investors welcomed the Storm acquisition, sending shares in iCandy up 5 per cent to 15c.

The acquisition is expected to be completed later this month.

Video game companies are fast looking to stake their claim in the metaverse – a term referring to 3D digital worlds accessed through virtual and augmented reality, often populated by NFTs, or non-fungible tokens, some of which have sold for millions of dollars.

NFTs are unique digital tokens representing ownership of an asset, and are commonly used for selling digital art, videos, music, online game items and avatars. They are bought and sold using cryptocurrency.

On Monday shares in ASX-listed Playside Studios soared by 21 per cent on the company’s successful ’Dumb Ways to Die’ NFT launch, before slumping by more than 10 per cent on Tuesday over revelations a technical issue caused some of its non-fungible tokens to be sold for ’minimal consideration’.

The issue related to the sale of 2223 Beans, but normal trading is restored and there is no expected long-term impact, PlaySide said. The company said it did not expect any material change to revenues earned from the original mint, given the strong secondary market volume which has ensued and the creator royalty this attracts.