While the pandemic ushered in a new era of takeout food and patio dining, even industries ostensibly benefiting from habit changes brought on by COVID-19 were in for a wild ride at the outset, according to Darcy Taylor.
“We had to adapt like everyone else out there,” said the CEO of Vancouver-based Leaf Mobile Inc. (TSX:LEAF), whose studio is best known for cannabis-themed mobile games like Cheech & Chong Bud Farm.
Beyond just adopting the remote working model, Leaf Mobile found itself on an acquisition spree over the past year-plus that saw it become a globally dominant player in casual idle games – a category known for allowing gamers to gain rewards through simple actions like repeated clicking. Gamers might even earn rewards or reach targets while they’re not playing, hence the “idle” description.
Leaf debuted on the Toronto Stock Exchange in February following its $159 million acquisition of Vancouver’s East Side Games Inc.
It followed that up the next month with a deal worth up to $37 million to acquire Truly Social Gaming Vancouver Inc., which also has offices in Portland and Belarus. That came after Leaf bought out Nanaimo’s LDRLY Games Inc. in April 2020.
Leaf Mobile’s revenue reached $25.3 million in the three months ending March 31, up 95% from the same period a year earlier.
Following the acquisition spree, the company’s run rate is now set for $93 million, according to Taylor.
The expanded portfolio of studios also allows the company “to translate or fit well with our sort of IP [intellectual property], narrative-driven games,” he said. “So the combination of the art and design with the science of building these games has been sort of a magic mix.”
Beyond pop culture icons such as Cheech & Chong, the newly combined gaming studio of just under 200 people is also working on titles like RuPaul’s Drag Race and The Trailer Park Boys.
“RuPaul is a perfect example of this, where you have the LGBTQ+ community that I would say really doesn’t have a true viable mobile game out there,” Taylor said.
While Leaf has been on the ascent, the broader B.C. gaming sector has been consolidating in recent years.
A report from the Entertainment Software Association of Canada in 2019 – the last time such a report was commissioned – found expenditures in the gaming industry totalled $3.18 billion across Canada with B.C. accounting for 26% ($826 million).
That’s the highest dollar figure among all the provinces after Quebec, which accounted for 47% ($1.49 billion).
Meanwhile, the report found the number of micro-companies – those with fewer than five employees – declined 5%, while standard companies (five to 99 employees) declined 34%, and the number of large companies (100-plus employees) increased 184%.
B.C. is the only province to experience a decline in the number of companies operating within it since 2017.
“British Columbia appears to be unique in that it has a greater number of standard companies than micro ones, which may reflect the relative maturity of the smaller companies in that province,” the report stated.
At least two other large companies in Vancouver have been expanding in the city in recent years. Relic Entertainment Inc. officially opened its new three-storey, 43,000-square-foot office in Mount Pleasant in the fall of 2019 for its 250 employees, and in 2018 Kabam Inc. announced it would lease 105,000 square feet of office space across seven storeys at the under-construction Vancouver Centre 2 tower on Seymour Street. As many as 400 people could be working there, depending on how the company brings employees back into the office.
“We’re one of the industries that benefited from the pandemic as people had more free time or were looking for avenues to entertain themselves. One of the main areas that they gravitated towards was gaming,” Taylor said.
“I would say it accelerated our growth or basically what we thought we would do over a year and pulled it pulled it forward, and now we’re just building upon that new baseline.” •
