Here’s the $160 million question about Santa Monica’s Game Show Network, best known for airing “Family Feud” and “The Newlywed Game” marathons: Why was it bidding that much to buy a smartphone bingo game?

The cable channel raised eyebrows when it revealed last month that it had agreed to pay up to $160 million in cash and earn-outs to buy Foster City startup Bash Gaming, maker of a popular bingo game playable on mobile devices and Facebook. The deal went south and Bash sold to another buyer, triggering a legal fight that brought the negotiations public.

The nature and size of the attempted acquisition might seem surprising, but it signals how serious GSN has been about moving into online and mobile games, analysts said.

“The writing is on the wall that you’re going to see more viewer fragmentation,” said Derek Baine, an analyst covering TV programming at SNL Kagan in Monterey. “A lot of these viewers will be going to mobile or the Web for content, whether it’s watching TV or playing games. Most of these cable networks understand you have to build a Web or mobile presence and take advantage of a brand name you’ve built.”

Ratings for GSN have remained flat over the last two years. But even that is better than many rivals, some of whom have seen viewership drop more than 30 percent, hurt by online services such as Netflix and increasing competition from more channels.

Facing industrywide headwinds, the company, owned by Culver City’s Sony Pictures Entertainment and El Segundo’s DirecTV, has bet heavily on another venture – developing online casino-style games. The games are variations of slots, bingo and poker, allowing players to compete for points instead of money.

As a result, while GSN remains small peas in the television landscape with an average viewership of 194,000 households, it has become a player in casual online games. It is one of the 10 biggest game developers on Facebook by number of daily users, according to a report last year by an industry trade group, and publishes one of the five top-grossing casino games for iPhone and iPad, according to a study last year by research firm GamblingData.

GSN declined to give revenue figures or comment on its dealings with Bash. But it reportedly expected $65 million in online revenues in 2010, the year the company began focusing heavily on online games. That would have accounted for 28 percent of total revenues, according to estimates from SNL Kagan.