Interesting info about Online Game Investments

We’ve just published our Global Games Investment Review 2012, and you can read the free Executive Summary at The complete 102 page Review and individual game Sector Reviews (mobile/tablet, social/casual, MMO, console, middleware and advertising) are available to purchase at

We think the big story for games M&A and investment could be ConsolidationVille: Social Games 1.0 M&A in 2012, and highlights of the Review are below:

Games investment and M&A more than doubled in 2011

– Private placements grew value by 96% to $2B, volume by 67% to 152 transactions, average fundraising round size by 17% to $13M
– Together with Zynga ($1B+) and Nexon ($1.2B) IPOs, investment value nearly quadrupled
– M&A grew value by 160% to $3.4B, volume by 88% to 113 transactions, average transaction size by 38% to $30.4M
– Private placement and M&A activity led by social, mobile, MMO and middleware

Social Games 1.0 M&A in 2012 – exit or consolidate (or you might miss the boat)

– Social/casual dominated investment and M&A in 2011 (57% of private placement value, 45% of M&A value)
– Zynga IPO may be the high water mark for Social Games 1.0, as it becomes harder to keep social games social (i.e. user acquisition and retention)
– Digi-Capital analysis comparing total games portfolio DAU and average individual game DAU shows some (e.g. Wooga, King) but not all delivering in a crowded market
– Current sector dynamics and dealflow indicates 2012 could be the year for Social Games 1.0 consolidating M&A

Social-mobile and cross-platform are the next battlegrounds for games investment and M&A

– Mobile/tablet 2nd in transaction volume (30% private placement, 27% M&A) but not value (16% private placement, 4% M&A) as an early stage market
– DeNA (2011 >$1.4B revenue at 50% operating margin) and Gree (12 months to December 2011 >$1.4B revenue at 46% operating margin) show what investment in social-mobile games can deliver
– Mobile/tablet, social-mobile and cross-platform (iOS/Android/social network) attracting serious interest from both investors and acquirers

Free-to-play and new market entrants reinvigorating MMO M&A and investment opportunities

– MMO 2nd (31%) in M&A value due to large scale transactions, but only 4th (8%) in private placement value due to investment risk profile
– Nexon (>$1.1B revenue at 58% EBITDA margin in 2011) shows why the MMO market is moving towards free-to-play
– Consolidating M&A and investment opportunities through 2012 due to continued MMO market transition and growth

Asian consolidating M&A and investment hold great promise, but local knowledge and relationship gaps remain

– Strong Chinese, Japanese and South Korean games companies are looking for Western M&A and investments, but local knowledge and relationship gaps remain
– Similarly Western games companies are looking for strong Chinese, Japanese and South Korean partners, but face the opposite side of the same challenge
– By bridging relationships and different business/investment cultures, we’re finding this may become one of the dominant axes for games M&A and investment

Console giants must accelerate pivot to online/mobile

– Electronic Arts has led the way with blockbuster M&A of PopCap and Playfish, yielding synergies with Sims Social
– Other cash generative console/MMO publishers have a window of opportunity for online/mobile investments and M&A before it is too late to change

Middleware is the dark horse generating significant investment and M&A

– Middleware 3rd by value in both private placements (18%) and M&A (16%) despite being lower profile than consumer games sectors
– High profile M&A from non-traditional sources such as Visa’s acquisition of PlaySpan for $190M shows the potential for middleware investors/management
– Accelerating M&A and investment in online/mobile middleware driven by growth in underlying online/mobile games markets

From Tim Merel, Posted by Richard van Barneveld


Governor of Poker is hot!

This month we have launched the Campaignizer campaign for Governor of Poker 2. Check this great

new landing page.

Governor of Poker is the absolute hit game produced by I Sioux Game Productions. The game was released in June 2008 and became a huge online success. The classic, but still very popular poker game Texas Hold’em has been transformed to a very original casual game. Different than in many other online poker games, in Governor of Poker you do not play for real money. What’s no difference is that the game is as addictive as other poker games. This is the first online poker game where casual game play and RPG elements are added.

The game has already been played by millions of gamers and has been ranked in the top 10 of several important casual game portals worldwide. In 2008 the game won a Dutch Game Award for ‘Best Online Game’. Because of the big success of the game it was released for iPhone in December 2009. The game has been ranked #1 in the App Store Top Card and Casino games for weeks. Also a version for iPad2 is available in the App store.

In July 2010 Governor of Poker 2 was released, a sequel with an all new poker engine and many new features. Professional and non-poker players alike will find a full house of reasons to enjoy Governor of Poker 2, thanks to a slick poker-tutorial, renewed poker engine and intuitive opponent AI. The game is 100% casual, meaning younger and non-professional players can learn how to play without the worry of losing real money at a table, while professionals will feel compelled to play until the end, sharpening their skills and ability to read whether they should see a round of Hold ‘Em to the final river card.