Hasbro purchases majority stake in Backflip Studios


In the interest of strengthening its mobile gaming offerings, Hasbro has purchased a majority stake in Backflip Studios, best known for games such as Paper Toss, DragonVale and NinJump.

As announced on its blog, Backflip Studios will remain based in Boulder, CO and will continue to be run by its current management team. It will continue to operate normally, supporting its current IP as well as developing new titles for the future. The studio will also have the opportunity to use Hasbro’s robust brand catalog of board games and toys.

Hasbro has paid $112 million in cash transactions for 70 percent of the company. (more…)

Caesars Interactive Entertainment acquires Bingo Blitz dev Buffalo Studios [UPDATED]

Caesars Interactive buys Bingo Blitz developer Buffalo Studios about a year after buying Slotomania developer Playtika.

While not surprising to see Caesars making another acquisition in the social/mobile games space given its long term commitment to being No. 1 in i-gaming, we are a bit surprised to see the casino branch going with Buffalo Studios when lately Bash Gaming (formerly BitRhymes) has been getting more media attention for its success with Bingo Bash on mobile.

The last we heard from Buffalo was in October, when the studio touted Facebook’s power of engagement, saying that 80 percent of Bingo Blitz’s mobile revenue came from Facebook players. In June, the developer partnered with Riviera Casino & Hotel for an in-game themed promotion, but that was the greatest extent to which we’d heard the developer was working with a land-based casino company.

UPDATE: A source with knowledge of the deal tells Inside Social Games that the base purchase price for Buffalo Studios was lower than what Caesars Interactive paid for Playtika. Like Playtika, the Buffalo acquisition also includes an earn-out amount based on future profit.

Terms of the acquisition were not disclosed. Caesars Interactive will retain 74 employees at Buffalo Studios’ Santa Monica studio and roll both Bingo Blitz and its game, Bingo Rush, into an affiliate of its Playtika subsidiary.

According to AppData, Bingo Blitz is currently the No. 6 most popular Facebook game in the Gambling category with 710,000 DAU, right behind Bingo Bash with 750,000 DAU. Zynga’s Texas HoldEm Poker is at the No. 1 spot with 6.5 million DAU, followed by Playtika’s Slotmania with 2 million DAU.

2012 mergers and acquisitions run-rate 40 percent higher than 2011, investment in social/casual games drops

Investment bank Digi-Capital today published its Q3 update for its Global Games Investment Review 2012; the mergers and acquisitions transaction value of 2012 has already surpassed the total from 2011 but games investment (particularly among social/casual games) is far lower than it was last year.

This year’s transaction value is now at 105 percent for the entirety of 2011, meaning the run-rate to  Q3 2012 showed a 40 percent year-over-year gain. Six of the 10 largest transactions of this past quarter were made by Chinese, Japanese and South Korean groups.

2011 was a record year for M&A, with a total of $3.4 billion being generated from 113 different transactions (the average value of these being $30 million).  This year so far, though, $3.6 billion has been generated over 71 transactions with an average value of $51 million. The Zynga acquisition of Draw Something developer OMGPOP for a reported $180 million back in March obviously had an effect on these numbers, but this year has seen fewer and larger transactions in general.

According to Digi-Capital, the transactions have been particularly focused on MMO titles, mobile and social/casual games and middleware. Likewise, the company’s larger Chinese, Japanese and South Korean clients are focused on M&A in these areas, while European and U.S. clients “are fishing in similar waters.”



Games investment isn’t seeing the same kind of growth as M&A, however. In 2011, there were 152 transactions resulting in $2 billion, with an average value of $13 million. As of Q3 2012, there have been 130 transactions for a total of $591 million, meaning an average of $4.5 million. Compared to Q3 2011, Q3 2012’s transaction volume is up by 14 percent, but the value of said transactions is down by 60 percent. That said, Digi-Capital says that even if this trend persists, 2012 could still see the investment levels of 2010, which is the second-highest year). A particular point of interest is that in 2011 the social/casual field accounted for 57 percent of the year’s transaction values and 32 percent of transaction volume; as of Q3 2012 it’s only responsible 8 percent of transaction value and 11 percent of volume.

“Our original view that Social Games 1.0 is a consolidating sector could continue through Q4 2012, with 2011’s wave of VC social games investment appearing to be over,” says Digi-Capital.

Electronic Arts acquires ESN

Electronic Arts has acquired Swedish tech firm ESN, the company responsible for Battlefield 3’s social platform Battlelog. The acquisition comes on the heels of EA’s closure of PopCap’s Dublin office.

The acquisition was revealed on ESN’s blog and the company will be working directly with DICE, the studio that develops the Battlefield games for EA (which happens to also be located in Sweden). The brief blog post also says ESN is looking for more people to join its development team, and openings are listed on the company’s career page.

Battlelog allows Battlefield players to interact with their friends, as well as use in-game features from the web like engage in chat and VoIP, utilize cloud-store save games and take advantage of web-based matchmaking and online events. ESN is also the company responsible for Beaconpush (HTML5 cloud server technology), the real-time web framework Planet and cloud-based VoIP service Sonar.

Zynga continues expansion into mid-core market, acquires A Bit Lucky

Today, Zynga announced it has acquired social game developer A Bit Lucky for an undisclosed amount, proving our April prediction right.

A Bit Lucky is the developer behind games like Lucky Train and Lucky Space, which were shut down on Facebook last week while the studio continued to work on its new multiplatform title Solstice Arena. In a phone call with Zynga GM Bill Jackson and A Bit Lucky’s founders Frederic Descamps and Jordan Maynard, it was confirmed that all of A Bit Lucky’s employees will become a part of Zynga San Francisco. The studio’s workforce is in the process of moving over to Zynga’s headquarters today and should be back at work tomorrow, continuing development on Solstice Arena.

Jackson tells us the acquisition marks another step for Zynga as it continues to expand into the mid-core market, a scene that the developer has struggled to be a presence in during the past. According to Jackson,  mid-core titles offer “rich deep gameplay experiences that would traditionally be associated with core gamers,” but are simplified and include social mechanics to appeal to a wider range of casual players.

Recently, the company has been stepping up its efforts. At Casual Connect, we heard about how the company was shopping around to pick up a mid-core developer. Following that, Zynga announced it partnered with Eruptive Games to publish Citizen Grim on both Facebook and Zynga.com. Meanwhile, Zynga’s continued to make some high-profile hires like John Tobias, co-creator of the Mortal Kombat game franchise.

Details on Solstice Arena have been kept vague up to this point, and nothing about the game was announced during our phone call, but Descamps and Maynard tell us we can expect to learn more about the title in the near future.

Zynga may be looking to core games for growth

Zynga’s corporate development team has been sniffing out developers of web-based hardcore video games, sources tell Inside Social Games.

Speaking on the condition of anonymity, two persons from separate companies confirm that Zynga’s acquisitions arm is reaching out to small and mid-sized developers with core games already live on open web and other games platforms. We understand “core” here to mean massively multiplayer online games, strategy or card games similar to Magic: The Gathering and possibly first-person shooters. Core games typically enjoy smaller audiences than Zynga’s casual games titles, but reportedly enjoy higher conversion and volume. The biggest player on Facebook in this space is currently Kixeye, with just over 5 million monthly active users and above 1 million daily active users.

Up to now, Zynga’s business has been firmly casual with a flavoring of i-gaming through its casino franchise games. While still reportedly profitable, it may be that the developer is reaching a point of saturation with audiences on Facebook and mobile. Zynga’s games destination site, Zynga.com, also doesn’t seem to be opening up its games to an off-Facebook audience. Our AppData traffic tracking service reports that the Facebook audience on the website numbers 5.2 million MAU and 1 million DAU and the user ticker on the site has reported DAU much above that.

Branching out to core games (and possibly other genres) could be a shot in the arm to Zynga’s growth. The developer has some experience with core games via Empires & Allies, which introduced turn-based unit combat vaguely similar to the combat system in Digital Chocolate’s Army Attack. It’s not clear how successful the experiment was in terms of increasing bookings; audience-wise, the game maxed out its audience within a month of launch at 52.3 million MAU and 7.7 million DAU.

A Zynga spokesperson says the company does not comment on rumor and speculation. The company’s Q2 earnings report drops tomorrow.

Roadhouse Interactive acquires The Embassy Interactive

Roadhouse Interactive announced this morning it has acquired  UFC Undisputed Fight Nation developer The Embassy Interactive, which has now been re-branded as Roadhouse Game Studios.

Although Roadhouse Interactive is known for web games like Family Guy Online and MechWarrior Tactics, it doesn’t yet have a presence as a Facebook game developer. With the addition of The Embassy Interactive, Roadhouse Interactive says it will begin working on games for Facebook, smartphones and tablet. We’ve reached out to ask if Roadhouse Game Studios will be creating licensed titles on these platforms, but have yet to hear back.

The Embassy Interactive is probably best-known for developing UFC Undisputed Fight Nation on Facebook. According to our traffic tracking service AppData, the game currently has 10,000 daily active users and 100,000 monthly active users, though it peaked in May 2011 with 116,000 DAU and 1.1 million MAU. Although the game is currently undergoing a traffic resurgence, it’s unlikely The Embassy Interactive would have worked on a follow-up UFC title as THQ recently sold the franchise’s video game rights to Electronic Arts.

Details of the acquisition were not disclosed at the time of writing. Roadhouse Interactive President Tarrnie Williams will be serving as the studio head of Roadhouse Game Studios. The Embassy Interactive co-founder Sebastian Reinzarz will stay on as Creative Director while co-founder Ryan Donaldson will serve as an external design advisor for Roadhouse Interactive.

GREE buys Crime City developer Funzio for $210 million

Japanese mobile social game network GREE has bought Funzio, the developer behind the popular mid-core mobile and social games Crime City, Kingdom Age and Modern War. According to a GREE spokesperson, the deal was worth $210 million.

As part of the deal Funzio’s CEO Ken Chiu and COO Anil Dharni will join GREE as senior vice presidents. Funzio’s CTO Ram Gudavalli and VP of engineering Andy Keidel will become vice presidents at GREE.

The acquisition is GREE’s biggest since April 2011, when the company bought OpenFeint for $104 million in order to bring its lucrative mobile social gaming network to North America.

Read the rest on our sister site, Inside Mobile Apps.

Who’s next on Zynga’s acquisition list?

A week out from its Q1 earnings call, Zynga is talking about making more multi-million dollar acquisitions on the order of OMGPOP’s $180-million buy last month. Who could Zynga buy and where can they be found?

If Zynga really has a $1.8-billion war chest, then it can afford to shop strategically for studios that will provide games with long shelf lives or services it can integrate with its own games platform in the long term. While the OMGPOP buy was all about doubling its mobile footprint and cross-promotion network, we think the next acquisition will be more about compensating for Zynga’s weaknesses.

One place where Zynga is not weak is Facebook; its games have had a death grip on at least five out of the top 10 games on our AppData rankings charts for almost two years. Off-Facebook, however, Zynga is still figuring out mobile — particularly Android — and its Zynga.com games platform is young and fragile. It seems like the next major buys will be aimed at shoring up these parts of the business.

Editor’s Note: Some obvious choices in social and mobile are left off this list because we’ve heard that these studios already received and rejected acquisition offers from Zynga. They could always come back to the table in the future, but as far as we know, they’re not in M&A talks at this time.


Zynga has made it clear it’s looking to mobile for expansion. But why invest in another iOS developer when it could get an Android expert? Google Play may not monetize as well as iOS, but Amazon’s Appstore is an Android variant that is doing extremely well — which tells us it’s not the platform itself that has issues.

In the long term, investing in established Android developers is a good idea for Zynga because the platform not only has a size advantage in the U.S., it’s also more popular in emerging markets like China and Korea. An Android developer with international appeal will help Zynga expand its userbase out from its North American hub. An Asian developer could also help Zynga’s Japan and China studios gain better footing in the lucrative South Korean and Japanese mobile markets.

Finally, while Zynga does casual well, it might also look to pick up a more core-focused developer to help it expand its established user-base beyond casual-social players.

Using that line of thinking, here are the mobile developers Zynga might consider:

Gamevil — The South Korean company currently has two games in the top 50 of the Android top grossing charts, plus a larger catalog of popular games. It also has a market cap of US$326 million, which makes it seem expensive, but that’s far less than what Zynga was reportedly willing to pay for Rovio.

DroidHen — This is the Sequoia Capital-backed company behind Android’s current top-grossing title, Defender II. For the past few months it’s been rare not to see a DroidHen game somewhere on the top of the Android charts.

Creative Mobile — This Estonian developer’s sports-themed Drag Racing games have been a hit. It’s currently the No. 4 top grossing Android app. Given the small size of the studio, Zynga could likely make the purchase at a fairly low price.


For social game studio acquisitions, Zynga is likely looking in two different directions: Asia and the West. While an experienced studio like Hoolai Games or Happy Elements would help Zynga break into or amplify its presence on Asian games networks like Tencent or Mixi, a Western acquisition would be more about finding talent than anything else.

As for what kind of talent, we’re thinking developers that can offer a service as opposed to a game — much like how DNA’s testing methods attracted an acquisition last year. This could help Zynga grow its games platform out of its too-similar-to-Facebook nascent stage. We’re also thinking of developers with experience in transmedia properties — like the studios that know how to make a TV show into a game or the ones that have experience in converting a non-social video game franchise into a social game. Zynga Slingo proves that there’s room for growth there with the right IP.

Zynga could also shop around on Facebook for developers to pad out its platform with games that it doesn’t already make itself. Hardcore combat games or classic casual titles, for example, are the kinds of things Zynga hasn’t made in the past that still perform well on Facebook and on other games portals. We’ve heard some developers speculate that if a third-party game performs well on Zynga.com, it could fast track its developer to an acquisition; if true, Playdemic, MobScience and Row Sham Bow are first in line.

Aside from those developers, here are a few that could be interesting prospects for Zynga:

3 Blokes (What’s left of it) — Though publisher RockYou acquired and then shut down the Australian developer, the key people at the studio are reportedly soldiering on in the core strategy genre. Assuming larger studios with expertise in these kinds of games are off the table, this might be an easy way to get into the core strategy market and to improve combat game mechanics in Empires & Allies.

A Bit Lucky — This Nexon-backed niche game studio has some smart ex-MMO developers behind it. Its last Facebook title, Lucky Space, never saw the traction of its predecessor, Lucky Train. Even so, both games had a lot more going on under the hood than the average social game from UI design and art to layered gameplay mechanics. At the very least, this team could help Zynga resolve its mapping issues in the various ‘Ville games.

GameVentures — We get the impression that this sports-centric developer has more of a presence on open web than on Facebook. Its baseball and cricket games, however, attract a more male audience than what Zynga’s is perceived to be and could the titles could tap into the fantasy sports league types. EA and Disney Playdom have already proven the appeal of the genre and Zynga currently doesn’t have anything in the sports category.

If you’ve heard anything you think we haven’t about Zynga’s current M&A prospects, drop us a line: mail (at) insidesocialgames (dot) com. If you’re somebody looking to get bought, check out Inside Mobile Apps’ article, Secrets of the acquisition process.

Zynga New York split into Mobile, Social studios with OMGPOP acquisition — gearing up for mobile publishing

With today’s OMGPOP acquisition, Zynga New York is split firmly into two studios: Zynga New York Social and Zynga New York Mobile. OMGPOP CEO Dan Porter now heads up the latter as vice president and general manager.

The Zynga New York Mobile studio is made up of both OMGPOP and Astro Ape, which Zynga acquired late last year to work on Dream PetHouse. The OMGPOP team will continue to work on Draw Something for mobile and other future projects — one of which Business Insider confirms as crime-themed game The Street. Draw Something will also officially arrive on Facebook as a playable game sometime “soon,” though it’s clear the developer is waiting for fan feedback before making the complete cross-platform jump.

“Aren’t you going to ask me if it’s going to be Draw SomethingWithFriendsVille?” Porter demanded during a 10-minute follow-up call scheduled after today’s media briefing. “I’m going to answer you anyway — if you don’t like the direction of the game as a player, then hit me up on Twitter and tell me what you think. I read every single thing people write about the game. We want to make games people want to play.”

OMGPOP has a history of trying various game types on different platforms to see what gets traction. On Facebook, its games have ranged from restaurant sim Cupcake Corner to the more arcade-y Pool World Champ. On mobile, it’s been pet sim Puppy World, puzzle game Boom Friends and now, most recently, Draw Something. The developer even has a true cross-platform HTML5 game, Gem Rush. Though each of these titles may have achieved traction in their respective markets at one time or another, only Draw Something stands out as a real hit.

Read the rest on our sister site, Inside Mobile Apps.

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