Swedish media group MTG has invested in Hamburg-based online game developer, InnoGames, acquiring a 35% stake in the company.

MTG has purchased the stake from InnoGames’ founders and Eight Roads Ventures, one of the games firm’s first investors, along with an option down the road to purchase a further 16% by September 2017 which will give it majority ownership. For now the current investment is being split into two tranches: 21% in Q4 2016 and 14% in Q1 2017.

The company is valued at €260 million according to today’s announcement.

The investment is part of MTG’s wider strategy for entering into the gaming and esports space. InnoGames will operate under the Swedish company’s MTGx banner.

“We have been involved in the gaming space for a while now, and look for companies with clear track records in IP development that have translated into high revenue growth and a healthy profitability profile over time,” said MTG CEO and president Jørgen Madsen Lindemann.

InnoGames says it has more than 150 million players globally with a particularly strong growth in mobile. It publishes the games Elvenar, Tribal Wars I & II, Grepolis, The West and Forge of Empires. It’s expected to pull in revenues of €125 million by the end of this year with several more titles scheduled for released over the next 12 months.

InnoGames has three studios in Hamburg and one in Dusseldorf but the US is its biggest market.

“MTG’s culture of empowering entrepreneurial spirit is exactly what we were looking for as we move into the next chapter of our story. The team could not be more excited about further boosting our future potential and performance,” added Hendrik Klindworth, CEO of InnoGames.

The investment is still subject to regulatory approval in Germany and Austria before becoming official.

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