Ottawa studio behind viral hit ‘Bendy’ acquires local firm Karman Interactive

bendy
Artwork from "Bendy and the Ink Machine."

The local game developer behind a viral sensation is returning to his roots to grow his burgeoning studio, acquiring Ottawa-based Karman Interactive – the same company that gave him his start in gaming a few years ago.

Kindly Beast, the Ottawa studio behind the wildly popular “Bendy and the Ink Machine” series of games, announced Sunday it has acquired Karman Interactive, a 12-person company founded in 2012. Details of the deal were not disclosed.

The acquisition hits close to home for Kindly Beast co-founder and CEO Mike Mood, who got his start in gaming a few years ago as a freelancer with Karman. Mood met the firm’s co-founder, Jon Keon, at an Ottawa developers’ meetup and quickly became one of Karman’s first contractors.

A few years later, Mood released what he initially considered a “throwaway project” called “Bendy and the Ink Machine” with his partner, an artist known as theMeatly. “Bendy,” a game uniquely blending horror and classic cartoon elements, quickly became an episodic series with an avid fan base. The game found early success in part thanks to popular streaming personalities playing through the story for their audiences.

‘A hit-based business’

Viral success in gaming is rare, and not all independent studios make their coin developing original properties like “Bendy.” In Karman’s case, while the company eventually wanted to get into its own intellectual property, Keon says the studio focused on client services to build up a “war chest” before striking out on its own ideas.

“It's a hit-based business,” he says. “And we were really worried about starting something, trying to bootstrap it, make an IP and then it failing.”

As the years went on, it seemed “Bendy” was on the verge of hit status, with growing demand for new instalments and interest from merchandisers. Around that time, Mood told Karman that he’d be scaling back his hours to focus on building his own business, which Keon says he understood completely.

"He was living the dream that we wanted to do."

“He was living the dream that we wanted to do. But we were also kind of wary that, maybe this is just a flash in the pan, and then he's going to need to come back,” he says, adding that the door was “always open.”

Mood did eventually come back, but not in the way Keon might have guessed. In 2017 the “Bendy” brand became so big that it warranted a spinoff mobile title and Mood tapped Karman to work on the project, which has since garnered a few million downloads.

That contract led to another the following year when the opportunity arose to port the original series onto mobile devices. It also led Mood to spend a few months at Karman’s Kanata offices, making him realize how much the two companies could do together.

“We’ve always wanted to acquire Karman because we knew they were really talented,” Mood says. “But working here at the office solidified that by seeing how they operate and what I could do with my company if I was to take their team and embed it into my team.”

For Karman's part, Keon and his co-founder Mike Baker saw an opportunity to work on the original IP side of the industry. Baker says the product pipeline Mood shared with the company got the team excited about what they could make if they joined forces.

Staying power

Perhaps unsurprisingly, Keon says he’s now confident “Bendy” and the Kindly Beast team aren’t just a “flash in the pan.” It’s not only the game itself that’s driving Kindly Beast’s business forward, he notes, it’s the community around the “Bendy” brand. YouTube videos featuring fan-made songs, artwork and playthroughs of the game have garnered hundreds of millions of views on the platform.

Kindly Beast has been fully bootstrapped since its inception, with no government grants or external financing of any kind. Though the sales of Bendy games bring in a fair share of revenue, Mood says the company’s biggest sales are actually on the merchandise side.

“Bendy” gear and paraphernalia are on the shelves in Walmart, Target and Hot Topic, and the team has even talked to fans who buy and wear the brand’s clothing without even realizing it’s originally from a video game.

“They've just fallen in love with the brand – through the merchandising, through the YouTube videos or any of the other avenues,” says Keon, who notes that having merchandise to diversify the revenue stream gives the company more staying power than a pure-play gaming studio.

“The games themselves are sort of an advertisement for the merch,” he says.

With a few more hires in the pipeline, the newly merged company will soon crest 30 employees at its Kanata South offices. Keon says Karman had just finished construction on an office expansion a few months ago and now they’re knocking down another wall to accommodate Kindly Beast and the pending growth.

The two parties look at the acquisition almost as a merger between the left and right sides of the brain. Keon says Kindly Beast has the creative spark that Karman was always looking for, while his own company has built up the discipline and reputation to bring the “Bendy” vision to life.

“By merging these two teams together, we now are going to have these really, really great ideas that we know we can execute on,” he says.

His business partner agrees. “It couldn’t be a better match, to be honest,” says Baker.