Cartamundi draws a digital card
For the first time in its 50-year history, Cartamundi, the global player in the production and development of cardboard playing cards and board games, is entering the world of digital games and e-sports. It sets up a separate company for this.
Monopoly, Cluedo, Risk, Uno, Catan and many others. For decades, the Turnhout family business Cartamundi has been causing a furore as a global market leader in the production of well-known board games for toy multinationals such as Hasbro, Mattel or Disney. In addition, it has become increasingly important in his historical business of playing cards, under own brands such as Copag, Bicycle and Fournier, but also in license cards for Pokémon, among others.
All physical products that stem from the age-old business line of the parent companies above Cartamundi, the printing and cardboard companies Brepols and Van Genechten Packaging. But the company has been struggling for years with the question of how it can sustain its growth in an increasingly digital gaming world.
“It is a challenge that we felt even more exacerbated during the corona crisis,” says Stefaan Merckx, the CEO of Cartamundi. Although the corona year with the lockdowns was a good year for the classic board games, the world of digital games is booming. We stood there and looked at it, frustrating. ‘
Because of that experience, the company decided to diversify drastically: in a few years’ time it also wants to make a difference in the multi-billion dollar business of gaming and esports. To that end, it founded Cartamundi Digital Ventures, a separate company to explore the digital games world, independent of the parent company. ‘We want to put our foot in the water and see in which niches of that market we can make a difference,’ explains Merckx. “As the name suggests, Digital Ventures can take risks autonomously, either in alliances with existing gaming companies, or with partial and full acquisitions or even start-ups of their own.”
The digital games and e-sports market, the competitive playing of computer games often with a physical audience in an arena, is worth $ 145 billion, that of physical games is worth $ 80 billion. “We are seeing growth in both categories,” says Merckx. According to studies, the first will grow to $ 200 billion by 2023, the second to $ 100 billion. So one does not displace the other. Consumers like to alternate brief moments of online and offline play. Rather, the battle takes place with other forms of entertainment: going to a concert, watching TV, baking a cake or exercising. ‘
Games maker experienced worst and best quarter in 2020
Cartamundi has had the worst and the best quarter in its existence in 2020. In mid-March, six of its 12 factories in the world had to close for nine weeks due to lockdowns and the loss of employees. Turnover halved. All casinos were closed in April and May.
‘But we soon felt the sale of board games increasing enormously,’ says CEO Stefaan Merckx. ‘That exploded in the fourth quarter. We then called in full interim and overtime hours. We could even have run a thirteenth factory. ‘
Ultimately, the company was able to close the year with 10 percent extra turnover (510 million euros), better than it had budgeted for corona. Profits are also better than expected. The shutdown factories were also used to help in the fight against the pandemic. ‘In Dallas we have produced face shields, assembled medical kits in Ireland and here in Turnhout we have developed a very high-performance FFP2 mouth mask in collaboration with the University of Antwerp, which we now produce millions of times a year in our spin-off Medimundi.’
Cartamundi Digital Ventures sees profit in the esports business, among others, says Paul Roberts, CEO of Digital Ventures. The Briton sold his Games & Print Services business to Cartamundi in 2003, was then director of Cartamundi’s UK division and then held strategic positions at the parent company.
Although the corona year with the lockdowns was a good year for the classic board games, the world of digital games is booming. We stood there and looked at it, frustrating.
Other examples include the Pokémon Go hype of recent years, a location-based game where participants follow their smartphones through the real world in search of virtual figures. But they can also become purely digital games. Many classic card games such as bridge are increasingly also played digitally in an online community.
Fortnite
Roberts does not want to become a challenger for the gaming giant Electronic Arts FIFA or for a hit like ‘Fornite’ with his company. ‘We mainly look in niches. We cannot say more about that yet. First we will put together the board of directors with people who know the gaming world through and through, then we will determine the further strategy. Then we can start recruiting and takeovers. We are already in talks about a first collaboration. But it will all be very gradual and careful. We are starting a diversification process, not for the coming years, but for the coming decades. ‘