viewKeywords Studios PLC

Keywords Studios steams ahead with growth plans


  • AIM 100 company
  • Focus on growing through acquisitions
  • Clients include Google, Microsoft and Nintendo
Keywords Studio

Quick facts: Keywords Studios PLC

Price: 1515 GBX

Market: AIM
Market Cap: £987.52 m


What Keywords Studios does

Keywords Studios PLC (LON:KWS) supplies a range of technical services to computer games developers and publishers.

Some of the services it provides include art services, software engineering, audio services, functionality quality assurance (QA), localisation (enabling games to be published in several languages), localisation QA, and player support.

Among its clients are Sega, Nintendo, Google, Microsoft and Warner Bros.

Established in 1998 it now has studios in more than 42 locations in 20 countries across four continents.

Keywords employs a buy-and-build strategy and has been expanding rapidly since its first acquisition in 2014.


What Keywords owns

The list of what Keywords owns is long and will most likely to continue to grow as the company aims to make six small bolt-on acquisitions each year and one or two larger purchases.

Some of its businesses include; Babel Media, which provides testing services to game developers; Kite Team, a provider of localisation and audio services to Latin America and Spain; and Alchemic Dream, a Canada-based business that supplies multi-lingual customer support services to the video games industry.

Others include Reverb, a Brazilian firm that the provides localisation and audio management services to games developers; Volta, a Quebec-based firm that supplies major games companies with outsourced art creation services; and Enzyme Testing Labs, a Quebec business dedicated to the functional testing of applications and video games.

Sonox Audio Solutions is the group’s Spanish firm that supplies audio services to game developers.

In China, Keywords owns Mindwalk, which provides outsourced art creation services to the video games industry, and Red Hot CG, which specialises in the production of graphical art assets for video games.

In France, businesses include localisation firms Arsec SAS, La Marque Rose SARL, Dune Sound and Around the Word.

Elsewhere in Europe, there is Synthesis, an Italian company that provides localisation, audio and testing services to the video games sector. Another Italian business includes Binari Sonori, which offers translation and voice-over services for games developers.

UK-wise, Keywords owns Liquid Violet, a voice production and casting studio; Player Research, a user testing and research consultancy;  SPOV,  a London-based animation and digital design firm; d3t, a video game software developer; and  XLOC, which develops a web-based content management system that can be integrated into any major 3D game engines.

Across the pond, GameSim is a US company specialising in outsourced video game localisation, art and sound, as well as providing live support services for gamers.

Other US-based firms are Sperasoft, which provides game development, art creation and software engineering services; video game art services company Liquid Development;  and VMC Consulting, a leading video games beta tester.

LOLA is a Mexican firm that provides Latin American Spanish dubbing, localisation and sound design services with clients including Warner Bros and Ubisoft.

Last year Keywords continued to expand through acquisitions by purchasing Sao Paulo audio studio Maximal Studio, music composition firm Cord Worldwide Limited, music services business Laced Music Ltd, arts services firm Fire Without Smoke and audio company Blindlight.

It also bought creative and technical services provider Snowed In Studios, artificial intelligence firm Yokozuna Data, engineering services businesses Electric Square and Studio Gobo, art services provider The TrailerFarm and Sunny Side Up Creative, which supplies marketing services such as game trailers.

In the first quarter of 2019, Keywords bought Dutch-based cloud software platform GetSocial, which provides a comprehensive and robust suite of functions that enable games developers to manage all social interactions between their game, their players and their friends' networks.

More recently, it added a trio of new firms, Kantan, an Irish developer of automated translation technology, Ichi Holdings, a London-based creative and marketing services firm Syllabes, a provider of audio recording and French and English casting services.


Inflection points:

  • In its results for the six months ended 30 June, Keywords reported an adjusted pre-tax profit of €18.4mln, up 14.3% on the prior year, while like-for-like revenues at constant currency climbed 17.3% to €146.4mln
  • In October, the company secured a new €140mln loan facility which it said would provide “further flexibility and headroom” to expand the business
  • The group's new chief financial officer, Jon Hauck, began his duties on 14 October


CEO Interview - Andrew Day


What analysts think

In a note on 31 July, analysts at Berenbery said in their investment thesis that they expected Keywords' addressable market to "outgrow" the wider video game segment as developers "continue to outsource a larger percentage of the development cycle, thereby adding growth over and above that of the underlying market".

"We believe that  Keywords’ best-in-class end-to-end platform and geographical reach will allow it to capitalise on this growth in outsourced game development, organically win market share and thus outperform the market."

Berenberg also believed that a blue sky scenario could play out where the company "i) deploys €60mln [per year] on [mergers and acquisitions] over the coming years; and ii) delivers organic revenue growth of 12% in 2019-20E."

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