How Kohort’s commercial due diligence enabled 52 Entertainment’s acquisition of BlackoutLab

5

Titles analysed with daily granularity for precise insights

1

Week to deliver a comprehensive due diligence report

Number of employees
51-200
Used by
Marketing, Corporate Development, Executive Management
Headquarters
France
Industry
Mobile Games
Use cases
  • Valuation assessment
  • Risk identification
  • Performance benchmarking
  • Strategic planning

Snapshot

52 Entertainment, a leader in the online gaming industry, was considering the acquisition of BlackoutLab, a Barcelona-based casual games studio known for popular table games like Bubble Shooter Rainbow, Word Search Quest and Spades, which boasts over 19.6 million monthly active users and 344 million downloads. To make an informed decision, they needed deeper insights into BlackoutLab’s financial health, game performance, and growth potential. Kohort was brought on board to conduct an objective, comprehensive commercial due diligence process, analysing five titles and 23 marketing campaigns in just one week. This provided the data-driven insights needed to guide 52 Entertainment's acquisition strategy.

Key contributions

Kohort focused on conducting a bottom-up cohort analysis to quantify various aspects of BlackoutLab's operations. Kohort set out deliver forecasts that would shed light on:
  • Health and performance expectations
    Kohort conducted a granular analysis of BlackoutLab’s assets, segmenting data by geography, platform, and channel to provide a detailed view of each game’s performance. Atypical networks were isolated to refine accuracy.

    The analysis further examined causal relationships at the country and platform level, while competitive benchmarks were used to identify opportunities for optimising platform ratios and enhancing overall performance.
  • Revenue and gross margin contributions
    Kohort quantified the potential revenue and gross margin contributions of BlackoutLab's assets, with a particular focus on optimising existing programmatic marketing practices. Additionally, the analysis identified specific product management opportunities that highlighted areas for improvement.
  • Distribution of P&L outcomes
    Kohort sensitised the distribution of profit and loss outcomes, providing a rationale for different performance scenarios.
In order to shed light on these areas, Kohort provided three core analyses that were crucial for informing 52 Entertainment’s decision-making:
  • Continuity case
    Kohort projected what BlackoutLab’s business would look like if operations continued unchanged, segmenting data by country, platform, and channel to predict new user trends, retention rates, and monetisation potential. This provided a baseline to assess the sustainability of current performance.
  • Marketing right-size
    Kohort identified optimal payback points for profitability by conducting a comprehensive analysis of marketing spend and volume. This involved assessing every lifetime value (LTV) curve for each paid segment and determining the maximum spend that would still allow for a cash-positive position within reasonable timeframes post-breakeven. By doing so, Kohort provided customised scenarios for different payback periods, offering a tailored view of how marketing investments could be scaled while maintaining financial health.
  • Product optimisation
    Kohort identified critical areas for product improvement by analysing metrics in comparison to similar games. This analysis revealed specific "dark spots" in product metrics that were potentially driving long-term LTV degradation, particularly at key points in the user retention curve. These insights provided 52 Entertainment with clear, actionable direction on which aspects of Blackout's assets to prioritise for optimisation.

Key results

Kohort’s detailed analysis led to several critical findings, including:
  • 40% of the segments analysed were missing ROAS targets.
  • Variability in potential across all titles analysed, such as pinpointing the title with the highest growth potential through marketing or product optimisation.
  • Insight into the optimisation of existing marketing campaigns
  • Projected revenue and sales margin impact from optimised UA investment over the next 3 years, even without product optimisations.
  • Discovery of retention weak spots across titles, where retention degradation was significantly worse than other points in the user retention curve.
  • Analysis of how remedying these weak spots would positively impact revenue and sales margin versus the continuity case.
Kohort's comprehensive analysis was instrumental in guiding us through the acquisition of BlackoutLab. Their data-driven insights into game performance, user acquisition, and product optimisation gave us the confidence to move forward, knowing exactly where we could drive growth post-acquisition. Kohort’s expertise ensured we made an informed decision, setting us up for success in expanding our games portfolio."
Vincent Tessier
CMO at 52 Entertainment

Successful acquisition of BlackoutLab by 52 Entertainment

Kohort's thorough analysis and insights provided 52 Entertainment with a comprehensive understanding of BlackoutLab's operations, potential growth avenues, and areas requiring optimisation. Using the data from Kohort, 52 Entertainment successfully acquired BlackoutLab in September 2024.

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