Interviews & Opinion

Why is Green Man Gaming planning on going public?

Why is Green Man Gaming planning on going public?

Yesterday, London-based digital retailer Green Man Gaming announced its intention to float on the Alternative Investment Market (AIM), part of the London Stock Exchange.

The firm has been valued at $128m and is the fourth British games company to do an IPO in 2018 to date, following in the footsteps of Team17, Codemasters and Sumo Digital - and before that, Keywords Studios and Frontier Developments.

Hours after the announcement, sat down with CEO Paul Sulyok at Green Man Gaming's offices to find out a bit more about why the entrepreneur had decided to take his company public.

"There are a few reasons," the exec says.

"First of all, it was always an ambition of mine to take this company to market. What we do and how we do it lends itself to a company that has a direct relationship with capital markets. That destination was always in the back of my mind. Ultimately, most entrepreneurs have the ambition to take their private company through that ultimate cycle to being a public company. Secondly, it's the stage we're at with the company. We have 100 people, we turned over £47.5m last year. Historically, we are EBITDA (earnings before interest, taxes, depreciation, and amortization) positive which is an important thing. We're at the right stage of the development.

"Finally, I have a fantastic team who really drive Green Man Gaming. I have a fantastic network of 670 publishers that work with us directly and those companies have been giving us support non-stop since 2010 when we first opened the doors of Green Man Gaming. Lastly but certainly not least, I have a brilliant set of customers. People all over the world use Green Man Gaming. From all aspects, it seems like it was coming together at the right time. There have been some great trailblazers out there. I was saying to someone earlier that I stand on the shoulders of giants, and the things that Andrew Day has done for Keywords is incredible. Carl Caver is a superstar, based on what he's done with Sumo Digital. Then the two latest IPOs: Team17, Debbie who is an absolute rockstar and what Frank Sagnier has done with Codemasters is legendary. I could never do that sort of turnaround job that he's done there - he has turned it into a bright light in the publishing ecosystem."

In 2012, Green Man Gaming bought data-driven social network Playfire. This service was closed at the end of 2016, but was integrated into the company's community offering. Looking back, Sulyok describes this deal as a 'cornerstone' moment

For Sulyok, the pitch to potential investors is simple - Green Man Gaming exists in one of the fastest growing businesses out there. And as games become more and more of a digital industry, it is in a great place to make the most of this growth.

"The market that we're in is very beneficial. Green Man Gaming has managed to grow at 25 per cent year-on-year for the last three years. I've got seven years of consistent growth as a business," Sulyok explains.

"Most of the senior management team have worked with me for at least six years. Only one new person has been introduced, our CMO Ian McGregor, who only joined a year ago. I've known him for 20 years. He used to work at Activision and EA, but we were in the army together. I've got a group of individuals around me that has delivered consistent growth. We're in a growing and progressive market. We're well-positioned with a strong team. That is our proposition for the markets. Ultimately, it's going to be up for investors to take a look at us and to weigh up what they have in their portfolio right now and whether they'd like to have something that has grown 25 per cent year-on-year and will continue to do so."

The market that we're in is very beneficial. Green Man Gaming has managed to grow at 25 per cent year-on-year for the last three years. I've got seven years of consistent growth as a business

Both Frontier Developments and Keywords Studios went public in 2013, but for the last five years, there hasn't been a great deal of interest from the finance community. Then, as mentioned earlier, we've had three British games firms IPO with Green Man Gaming set to be the fourth. Just why are investors interested in video games now?

"There are two reasons. One is a longer-term reason; one is short term," Sulyok says.

"The longer-term reason is what you are seeing in the UK right now from a technology and entrepreneurial perspective is the fruition of 20 years worth of planning. You look at what we have in this country - we have SEIS and EIS investment, you have tax breaks for gamers, you have R&D tax credits. There are strong venture capitalist and private equity communities, as well as the Alternative Investment Market part of the London Stock Exchange, which is a perfect channel to go through. You combine that with flexible employment laws that we have in this country and a vast pool of talent and what you have is a little crucible which is absolutely ideal for small and fledgeling tech and games companies.

"Then you combine that with what we have in Great Britain. There are two things we are really good at in this country. We're really good at technology. Our universities excel in this regard. We embrace tech more so than many other nations do. We are a creative nation. Great Britain has historically, be it in film or music, we love participating in the creative industries. Those two components are the core that creates a games industry. You need to have the technology and you need to have the creative side of things. You put those together then wrap them around with an environment that encourages, promotes and fosters an entrepreneurial spirit, that's how you get a games industry. Where we've come from - whether it's people who have founded their own companies to people who have been brought into companies to restore them and then take them to market - all of us have touched various parts of this industry. When Andrew Day went out there with Keywords and was talking about the computer games industry and was building up that head of steam behind the industry and educating people, it's significantly easier for me to go out there and talk to investors now because they have already heard of Sumo Digital, Team17 and the others. They've probably already invested in all of them."

As well as being a retailer, Green Man Gaming also features a publishing division that to date has released titles such as Splendy's The Bunker which starred The Hobbit actor Adam Brown (pictured)

Neither Sulyok nor his chief financial officer Callum Jay have ever taken a company public before. But the CEO says that the assistance and advice he has received from other top execs in games who have gone through the process has been invaluable.

"The other CEOs that have been through the process that we're embarking on right now have been incredibly helpful and supportive, giving me references and direction," Sulyok says.

"Having that feedback and support mechanism of other CEOs and senior management teams who have been through it in our industry has been really helpful."

Part of the proceeds of the IPO is going to be spent on mergers and acquisitions. Sulyok says that the company is after anything that adds value to his company.

"What we'll probably look at is companies that have unique technology that could support Green Man Gaming," he says.

"The purchase of [social network] Playfire in 2012 was a very much cornerstone moment for us. Companies that have potentially large customer bases in a related market to ours would also potentially be of interest to us. Companies that have content - because we're a publisher as well - so there is a possibility for us to consider in-housing some developers. Those are the types of businesses that we'd look at - anything that supports that core business proposition of Green Man Gaming."

There isn't a date set for GMG going public just yet - so far the retailer has just announced its intention to do so. But looking towards the next year, Sulyok says the objectives are twofold - continue growth and raise awareness of the brand.

"It's pretty clear why people are interested in the company. We're a topline growth company that's grown 25 per cent in the last three years and we have a significant topline revenue," he explains.

"We aim to really start driving market awareness of Green Man Gaming. As a brand, we are practically unknown in what we do. The customers that buy from us are loyal and engage with us and continue to engage with us. But other than that, we are practically unheard of. My budget was tiny for brand marketing last year. I don't think we had any brand marketing the year before. We really didn't have the opportunity to drive market awareness. We want to drive performance marketing. All of those things will start to come into play at the back end of this year and the start of next."

PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.