In a move to further consolidate the mobile gaming industry and to obtain lucrative licensing deals for several Hollywood franchises, last week mobile-game maker SGN of Culver City acquired game developer TinyCo of San Francisco for an undisclosed amount.
TinyCo is projected to generate $100 million in revenue this year, which SGN said would boost its total revenue to nearly $500 million.
TinyCo’s games have been downloaded more than 100 million times since April 2014, according to the company. Titles based on Hollywood franchises include “Family Guy: The Quest for Stuff” and “Marvel Avengers Academy.”
The acquisition of TinyCo is part of a larger trend of mergers and acquisitions in the video-game development and distribution industry, the largest example being Activision Blizzard’s $5.9 billion February acquisition of King Digital, which makes popular mobile puzzle-game apps Candy Crush and Farm Heroes.
“The total revenue generated (in the video-game industry) is growing year over year, but the number of publishers and developers are fewer and fewer,” said Josh Yguado, SGN’s president and co-founder. “Sort of like the film industry, there is always some room for independence, but generally the barriers for entry are increasing. The ability to have larger budgets as well as a large cross-promotional base of users makes it a lot harder for new entrants to succeed.”
Not to be swallowed by industry trends, SGN received a $130 million investment from South Korea’s Netmarble Games last year and has made three acquisitions since, including the purchase of two small gaming studios in December. The company’s portfolio of mobile games, which include Cookie Jam and Panda Pop, have been downloaded more than 700 million times and have 45 million active users.
A key consideration for buying TinyCo was the company’s licensing deals to develop video games for several Hollywood franchises in the next 12 months, said Yguado, adding that SGN is working on several franchise projects of its own. He declined to say what the properties were.
TinyCo’s 125 employees will remain in San Francisco, but will all join SGN, bringing the combined company’s workforce to about 400 employees.
Ultimately, Yguado said he sees increasing opportunity in reversing licensing deals and developing video games into entertainment content.
“Two of the top films at the box office recently were ‘Angry Birds’ and ‘Warcraft,’ both based on video-game IP,” he said. “So many players are spending so much time with characters and storylines in games that they become meaningful to them.”
App Adventures
Because former Israeli women’s surf champion Roni Eshel has traveled the world with the globe’s top wave riders, she always knew where to find the best surf spots. It was a privilege she realized many others did not have.
Her company, Arkactive Inc. of Venice, has raised about $2 million in seed funding and launched its GoFlow app on iOS and Android in March to help users find and share information on the best local outdoor experiences such as surfing, paddle boarding, kite surfing, and skateboarding. For example, the app allows users to share pictures and first-hand surf reports with each other.
GoFlow has more than 25,000 active users, with most concentrated in California, Brazil, and Japan, said Eshel.
Key to Arkactive’s money-making plans is GoFlow’s paid experiences feature, which facilitates paid hourly tours and lessons in the L.A. area led by outdoor sports experts.
“Guides are people who are users of the app and have skills to teach,” said Eshel, adding that, for example, “You can find a local friend to show you around and take you out surfing.”
Arkactive plans to expand to other regions after perfecting its business model in Los Angeles and will eventually take 15 percent of each transaction, she said. The company is also looking at facilitating equipment rentals.
Ultimately, Eshel said she sees the app helping passionate members of various sports communities connect, share information, and get outdoors on a regular basis.
“Managing an active lifestyle is a full-time job,” she said. “Today, there is no one-stop shop for managing an active lifestyle.”
Saving Snaps
Snapchat – an app that made its name disappearing images, videos, and messages – announced last week in a blog post that it will allow users to start saving content within a Memories feature next month.
The announcement was a major shift for the Venice company as it tacks toward becoming a more traditional social network. Under the new scheme, users will have a permanent gallery for their pictures and “Stories,” a kind of in-app slide show.
Launched in 2012, Snapchat’s disappearing feature was used frequently by users sharing risqué pictures and videos. Nodding to that original use case, the company is implementing certain safeguards, including a private gallery.
“We made it easy to move (images) and stories to My Eyes Only – and avoid awkward moments when a friend stumbles upon a Snap meant just for you,” Snapchat wrote on its blog.
Staff reporter Garrett Reim can be reached at [email protected] or (323) 549-5225, ext. 232.
