There has been a steady stream of financial activity since the beginning of 2012. In our new column, Acquisitions & Investments, we highlight the recent financial activity in the gaming industry.
FUNDING
May 7: Machinima is looking to raise more than $30 million – Machinima announced it is looking to raise money and Google has already committed to participating. This round of funding puts Machinima’s valuation at $190 million. Using YouTube as its primary distribution platform, Machinima has created a strong video content business and claims to have 168 million monthly uniques in April alone. The company’s total audience reached 11 billion between 2011 to 2012.
April 18: MoMinis raises $4.5 million - MoMinis, a mobile game company based in Israel, raised a Series B round that included investments from BRM Group and Mitsui Ventures. Best known for its Android games, the company was founded in 2008 and has raised a total of $9.2 million to date. MoMinnis’s games have been downloaded more than 16 million times and games such as Ninja Chicken are well ranked globally.
April 18: Aeria Games gets funding – Aeria Games announced it received an undisclosed amount of funding from Sony subsidiary, So-net Entertainment. Aeria Games is based in Japan and back in March announced it set up a new mobile division in Santa Clara, California, called Aeria Mobile. Aeria has 40 million gamers worldwide.
April 2: Dragonplay raises $14 million in Series A round –With the mounting interest in online gambling, Tel Aviv based Dragonplay has secured a large Series A round. Investors include Accel Partners, Entrée Capital and Founder Collective. Accel Partners was also an early backer of Facebook, Rovio and Groupon. Dragonplay’s game Live Hold’em Poker Pro has over 12 million downloads. Other games from the company since its launch in 2010 include Live Blackjack, Farm Slots and Sea Battle.
April 2: Big Door raises $5 million – Big Door announced its second round of funding, which now puts the total raised at $13 million for the company. The investors included Foundry Group, Founder’s Co-Op and several additional investors. Big Door also announced their Gamified Rewards Program that includes exclusive rewards, virtual items and real world rewards. There are also analytics and performance tools focused on Key Performance Indicators (KPIs).
March 27: Machine Zone raises $8 million – Addmired, the Y Combinator startup, is re-branded as Machine Zone and announced a Series B round of $8 million from Menlo Ventures. Gabe Leydon, Machine Zone’s CEO, turned the once social network dating app into a mobile game developer with 40 million downloads.
March 21: Red Robot Labs raises $5 million – Red Robot Labs from San Francisco raised $5 million from Taiwanese media company, Next Media. Founded in January, 2011, Red Robot provides location-based games for the core games market that has an animation layer added and includes 3D graphics. The investor, Next Media, is part of Jimmy Lai’s media empire that is known for its animation news feeds.
ACQUISITIONS
May 1: Funzio gets acquired for $210 million – Back on April 16, Funzio made a public announcement that they were looking to raise $50 million on a valuation of $350 million. It certainly didn’t take them long to find an investment partner in GREE, who purchased the company 16 days later for $210 million. Obviously, the amount is lower than Funzio’s proposed valuation, but as an all-cash deal, things seem to have worked out well.
April 9: Facebook acquires Instagram for $1 billion – Facebook acquired Instagram for $1 billion in a cash/stock deal that came as a surprise announcement. Instagram has been building steam fast in the last year. A year ago, the company was valued at $100 million which grew to $300 million quickly. The golden nugget, of course, for Facebook is that Instagram offers a mobile photo sharing platform that Facebook didn’t have and was desperate to get into. With the impending Facebook IPO, it should be a happy union for all.
March 21: OMGPOP is acquired by Zynga – Much has now been written about the OMGPOP acquisition. Based on the success of Draw Something and the 50 million downloads it had in 50 days since its February inception, OMGPOP found a home with Zynga after bumping them off the Facebook charts and becoming the fastest selling game on iTunes. With 14 million daily active mobile users, Draw Something beat out Words with Friends’ 8.6 million daily users who are both Web and mobile based. The acquisition gives Zynga a straight play for their mobile strategy. Yet, even though the acquisition initially grew Zynga’s daily traffic by 25%, Draw Something seems to have shed 4 million in just over a month.
OMGPOP has 40 employees and has become Zynga New York, with Dan Porter now VP and GM of the office. Before the acquisition, OMGPOP had raised $16.6 million in venture capital.
March 6: Big Fish Games acquires Self Aware Games for $12 million – A regulatory filing shows that Big Fish spent $12 million in stock for Self Aware Games, with an additional $3.4 million available upon hitting milestones. Big Fish Games has been frugal in their investments and has not made any significant acquisitions, until now. They have been sitting on $83 million in cash they received back in 2008, and now it seems they are starting to make some investments. Self Aware Games has the top grossing paid app on the iPad, which makes great sense for Big Fish as it gives them more expertise in mobile gaming. In separate news, Big Fish announced that its CEO, Jeremy Lewis, was stepping down and would hand over control to the company’s founder Paul Thelen.
PUBLIC COMPANIES
May 17: Facebook readies for IPO – The largest Internet IPO ever to hit the financial markets is coming in just over a week thanks to Facebook. Facebook is hoping to raise up to $10 billion, with a share price of $28 to $35. That would put the company’s valuation at between $85 billion to $95 billion, making it larger than Disney in terms of market cap. The Facebook IPO prospectus and the company’s video roadshow is available for viewing at: http://
May 7: GREE and DeNA stock plunge 25% with investigation – In a sweeping blow to the Japanese social games industry, Japan’s Consumer Affairs Agency is investigating both companies as well as four other companies in what it is calling “complete gacha”, referring to a violation of the law. This sent the stock price of both GREE and DeNA to plunge more than 25%. All companies said they will comply with regulators.
May 7: EA’s revenue reaches $4.2 billion for the year – Electronic Arts had a strong year with the help of its growing digital revenue, which reached $1.2 billion for the year ending March 31, 2012. EA plans on growing their digital revenue by another 40% this year. This is a great sign for Origin, the company’s digital platform that launched last June and currently has 11 million registered users. Even after beating analyst forecasts for the year, EA stock slipped 9.5% and is at a 10-year low of $14.48 per share.
May 3: Glu Mobile sees 192% growth in smartphone revenue – Glu Mobile reported their first quarter 2012 results showing strong growth for its smartphone, tablet and original IP games. With a freemium business model, the company had revenue of $21.5 million for the quarter, compared to $16.4 million in the first quarter of 2011. While Glu is still operating at a loss, they anticipate cash flow break-even by Q4 2012. In added news, Glu acquired the successful Deer Hunter trademark from Atari which they have been licensing for the past 7 years. During that time, Deer Hunter has generated more than $21 million in revenue for Glu.
April 16: Zattikka goes public on London Stock Exchange – Zattikka, a social mobile game company located in London went public on the London Stock Exchange. With an initial listing price of $1.58 a share and a market cap of $35.8 million, the company also announced it has purchased Hattrick Holdings, Sneaky Games and Concept Art House to develop games across Europe, North America and China. Zattikka was founded by Tim Chaney and Mark Opzoomer, both former Virgin Interactive executives.
April 5: Ateam goes public on the Tokyo Stock Exchange – Founded in 2000, Ateam started as a digital content producer of websites and mobile content. Today it also develops social games for GREE, Mobage, and Mixi and has a partnership with GREE to co-develop social card games such as Dark Summoner.
April 4: THQ’s Market Cap Hits Rock Bottom – THQ’s market cap plummeted since early 2011, when it was over $2 billion. In April it dipped to an all-time low of $35 million and has since nudged its way up to $45 million.
