Dhe second largest chess company in the world, the Play Magnus Group, is bought by market leader Chess.com. The Play Magnus Group, which is linked to world chess champion Magnus Carlsen, would probably have run out of money in 2023. To cut costs, the company, which sells apps, instructional videos, books and school chess courses, recently closed its Hamburg location. 29 employees of the subsidiary Chessable, which was previously considered profitable, were made redundant. The share was temporarily worth 77 cents on the Oslo Stock Exchange.
Chess.com now offered 13 Norwegian kroner, the equivalent of 1.35 euros, per share. The management of the Play Magnus Group has already accepted the offer. Several brands are to be retained, but the German chess24 will probably disappear. A question as to whether further layoffs were pending was not answered. Since the small investors are not organized, it is unlikely that a blocking minority of ten percent plus one share will come about. They will mostly exit with losses. Anyone who holds at least one percent of the shares, on the other hand, gets the chance to acquire shares in the quasi-monopolist.
“Multiple players are always better because there is competition. But the group was bleeding and has already burned around forty million euros,” analyzes French chess entrepreneur Bachar Kouatly. He bets that the Chess.com platform, which opened in 2007, is aiming for its own IPO. The American platform benefited from the fact that the previous competitor could not offer a mature online game. Chess fans hooked on Carlsen’s apps and online tournaments flocked to Chess.com, which reports ninety million users. Perhaps the most important selling point is the World Champion himself. Shortly before the deal was announced, Carlsen played online on Chess.com for the first time in a long time.
“The West doesn’t matter anymore”
During the several months of negotiations, Carlsen decided not to defend his title, which had been awarded by the world chess federation FIDE. “We don’t know what role the upcoming deal played for him,” says Kouatly. He sees hard times ahead for FIDE, of which he was Deputy President until recently, without Carlsen. The survival of classic tournament chess on the board now depends more and more on eastern chess associations such as India, China and Russia. After long-time Kremlin politician Arkady Dvorkovich was re-elected as FIDE President in early August, Kouatly is certain: “The West no longer plays a role.”
The English chess dealer and organizer Malcolm Pein sees FIDE as the loser of the forthcoming merger: “Chess.com will have a potentially enormous negotiating position in the future.” For western sponsors, the platforms together with Carlsen are the more attractive option. Most recently, FIDE collected millions for broadcasting rights and was thus able to keep its members happy.