Embracer Group has entered the virtual reality market with the purchase of Arizona Sunshine developer Vertigo Games for an initial €50 million ($59.2 million). 

The deal will see Embracer purchase the Dutch VR studio through its Koch Media subsidiary for €40 million ($47.4 million) in cash and €10 million ($11.8 million) in newly issued B shares, although it could pay out an additional €25 million ($29.6 million) in cash if certain financial and production targets are met over the next decade.

Vertigo has developed and published a number of VR titles including Arizona Sunshine, A Fisherman's Tale, Skyworld, and After The Fall. The company also runs an arcade business that sees it distribute proprietary and third-party VR titles to arcade operators around the world. 

Following the deal, Vertigo will continue to operate independently under the Koch Media umbrella, and will work across the overall Embracer Group to "find wider collaboration within VR." 

"We have been monitoring the VR market over the past years very closely. We feel that now is the right time to extend our groups activities into this fast-growing market," commented Koch Media chief exec Dr. Klemens Kundratitz. 

"I am sure that we are only at the beginning of the technological development of VR and what it offers players around the globe. Together, we will push the boundaries of VR gaming even further, combining our strong global development and publishing network with their specialized VR games expertise."

Embracer's latest purchase comes just over a month after it announced a swathe of acquisitions including Metro developer 4A Games.