Epic Games expands its growing empire, acquiring Chair Entertainment

Cary, N.C. — Epic Games, developer of the best-selling “Unreal Tournament 3” and upcoming “Gears of War 2,” is expanding.

The independent, privately held studio has purchased Utah-based Chair Entertainment Group, creators of the popular Xbox Live Arcade game “Undertow” and the upcoming Orson Scott Card videogame “Empire.”

Earlier this year, Chair also secured rights to develop a game based on Card’s science fiction classic, “Ender’s Game.”

Financial terms weren’t disclosed.

Under the terms of the agreement, Chair Entertainment Group will operate as a wholly owned subsidiary of Epic Games. It will also continue to operate under the same name while maintaining its focus on creating new original game properties that utilize Epic's Unreal Engine technology.

"We really liked what Chair was doing with our technology and some of the new [properties] they were designing, so we decided we'd like to be more closely involved with them and approached them about this," said Mark Rein, vice president at Epic Games.

Founded in 2005, Chair Entertainment Group is jointly led by directors Donald and Geremy Mustard and Chief Executive Officer Ryan Holmes. In 2007, after several years of building games with Unreal technology, Chair entered into an agreement with Epic to make Unreal Engine 3 its exclusive technology for game development.

"Having worked with Epic's Unreal technology for many years, our team has become very proficient with the engine, and so it's a really a very natural fit for us as a company," Holmes said. "Epic buys into the creative vision we have for the company and can provide the resources needed to deliver on the vision we have for our games."

Rein added that Chair has proven to be proficient at making smaller Xbox Live Arcade-style, games with UE3 technology, which is something from which Epic can benefit going forward. The plan is to bolster Chair's internal development staff, with Epic providing funding to fuel the growth.

"We've been continuously impressed with what they've done using our technology, but more importantly what they've done with a small, efficient team and limited financial resources," said Rein. "They have some really great people and some great ideas for future games that we'd love to see made."

Epic will also become involved in the Empire game Chair is developing, although details on how this game will be affected weren’t disclosed. The game is part of a three-pronged entertainment outreach that debuted with the Empire book and has an Empire movie in development at Warner Bros. with Joel Silver producing.

In August 2007, Epic acquired a majority stake of Polish developer People Can Fly, creators of the Painkiller shooter franchise.

"I think this is a pretty similar deal – we see a great team with a ton of potential, but limited financial resources, and we're able to step in a help them improve their situation and ultimately achieve their goals," said Rein. "It's a win-win situation."

When asked if he sees these types of acquisitions as the path to remaining independent in today's consolidating game space, Rein replied, "What I see at Chair is a studio that can ultimately create some different types of experiences to the things we do here in-house, so you could consider it as a form of diversification."