2011’s Social Game-Related Mergers & Acquisitions: Inside Social Games and AppData’s Performance Review

In 2011, Inside Social Games tracked nearly 20 mergers and acquisitions involving Facebook game developers and publishers, with total disclosed purchase prices in excess of $1.7 billion dollars. Here are the biggest M&A stories of the year.

Often the results of these purchases and mergers were observable on AppData, our data tracking service. For instance, some developers enjoyed the cross-promotional and advertising power of their new parent company, while others saw their games sunsetted, as the development teams transitioned to other games within the company’s portfolio. To better contextualize the data, we’ve provided our list in chronological order. Additionally, Zynga has been given its own category, as it made at least eight game-related purchases throughout 2011.

RockYou acquires Playdemic – January

Publisher RockYou purchased UK-based Playdemic, creators of the farming-restaurant sim Gourmet Ranch, for an undisclosed sum right at the beginning of the year. Roughly 10 months later, RockYou sold Playdemic back to the studio’s founders as part of a dramatic restructuring.

In the months leading up to the January 2011 purchase, Gourmet Ranch was attracting MAU in the mid six figure range, and strong engagement rates of between 15 and 25%. In the months after the RockYou’s purchase, MAU grew rapidly, reaching a peak of about 6 million in June before beginning a gradual decline for the rest of the year. In the four weeks before RockYou sold Playdemic back to its founders, Gourmet Ranch saw a jump in growth that took DAU/MAU from 10% to about 26%. This growth continues even now, currently seeing around 30% DAU/MAU from 490,000 MAU. For RockYou’s part, the company has seen growth of about 3.15 million MAU since the November cutbacks, and now has 6.9 million MAU. The company also saw a drop of DAU/MAU during that period, falling from 18% then to 13% as of this week.

Visa acquires PlaySpan for $190 Million – February

Credit card giant Visa purchased game monetization service provider PlaySpan for $190 million in cash toward the beginning of the year. The acquisition is significant in the social games industry as it marked Visa’s entry into the virtual goods market — where PlaySpan facilitated transactions within Facebook and other web game platforms. Though we have no data-driven way to track the influence Visa had on PlaySpan post-acquisition, we do observe that the PlaySpan Marketplace page saw a very sharp spike at the time of the Visa announcement, jumping briefly from 6700 MAU to 23,000, before returning to normal usage levels of between 4000 and 6500 MAU. PlaySpan told us in August that a partnership with Facebook allowed the company’s continued existence on the platform following the mandatory integration of Facebook Credits as the sole currency.

PopCap Games acquires ZipZapPlay – April

Before its own acquisition by EA (see below), casual game publisher PopCap acquired developer ZipZapPlay, developer of the pet game Happy Habitat and the restaurant sim Baking Life, for an undisclosed sum.

As part of the acquisition, Happy Habitat was taken offline. Baking Life, which had about 2.5 million MAU and about 20% DAU/MAU at the time of the acquisition, was placed in “evaluation mode” while PopCap considered whether or not the aging game was worth saving. Though the game continued its slow but steady loss of users that began months before the acquisition, MAU stabilized around October, and DAU/MAU now runs between 22 and 24%.

Harrah’s (Caesars Entertainment Corporation) acquires Playtika $80 Million+ – May & December

Slotomania developer Playtika was first partially acquired by Caesars Entertainment Corporation through its Harrah’s casino brand in May — and then completely bought out in December. The total price of the acquisition is reportedly between $80 and $90 million.

According to our data tracking service AppData, Playtika’s Facebook games — Slotomania, Farkle Pro, and a Chinese-language version of Slotomania — had a total of 2.3 million MAU in the month leading up to May. During that month, the developer gained nearly one million MAU and has enjoyed steady user growth ever since. Currently, Playtika’s overall library has 5.9 million MAU and a DAU/MAU rate of about 25%.

RockYou acquires 3 Blokes – June

RockYou purchased the Australian-based developer for an undisclosed sum, with the stated intention of putting the studio in charge of its strategy and combat titles on Facebook. At the time of the acquisition, 3 Blokes’ four Facebook games had 200,000 total MAU, led by its space-based RPG Galactic Trader (published by 6waves Lolapps) with about 175,000 MAU.

After the developer joined RockYou, its own library of games steadily lost users, and now stands at just 9,520 MAU. Its first game for RockYou, Galactic Allies, launched in September and gained 200,000 MAU before shrinking to its current level of 80,000 MAU and a low engagement rate of under 5% DAU/MAU.

EA acquires PopCap Games for $1.3 Billion – July

EA acquired PopCap Games for $650 million in cash, $100 million in stock, and multi-year earn-outs that would bring the total purchase price to $1.3 billion. The purchase expanded EA’s large library of Facebook games from its social game arm Playfish, such as The Sims Social, and its brand titles such as Scrabble with PopCap’s Facebook hits Bejeweled Blitz and Zuma Blitz.

Since the acquisition, Bejeweled Blitz has very gradually declined from 10.5 million MAU to 8.9 million MAU today, while DAU/MAU has remained very strong throughout, fluctuating between 26% and 34% as of this month. Meanwhile, Zuma Blitz dropped from 6 million MAU in June to 2.3 million MAU now; at the same time, DAU/MAU has increased in that period, rising from 15% to over 25% today. In July, PopCap attempted to launch brand new IP on the platform with Pig Up!, but the title appears to have been abandoned by the developer.

Publisher 6waves merges with developer Lolapps – July

Ravenwood Fair developer Lolapps merged with Ravenwood Fair publisher 6waves in July to form 6waves Lolapps. The newly minted company raised $35 million from Insight Venture Partners and Nexon just one month later and went on to establish a $10 million fund for social and mobile game developers in September. The developer officially entered the mobile market this month by publishing two games from developer Escalation Studios on iOS.

Ravenskye City, a continuation of Lolapps’ Ravenwood Fair launched in October, now enjoys MAU of 4.9 million and very stong DAU/MAU rates over 20%. Since the July acquisition and August funding announcement, the company has seen relatively steady user activity, fluctuating between 12 million and 20 million (both as a developer and publisher), boosted by the October publications of Zombie Island from Vizor Interactive and Airport City from Game Insight. 6waves Lolapps currently enjoys 14.8 million MAU as a developer, and 12 million MAU as a publisher.

ngmoco acquires Lionside – September

Leading mobile game developer and publisher ngmoco (itself bought last year by Japanese mobile giant DeNA) acquired sports game developer Lionside for an undisclosed sum in September. At that time, Lionside had a total of about 375,000 MAU, primarily from its game NBA Legend: Official NBA Game but since, has seen a steady decline to a current level of 70,000 MAU and low engagement below 10%.

6waves Lolapps acquires Smartron5 – October

Four months after its own merger (see above), social game publisher-developer 6waves Lolapps bought Beijing-based social game developer Smartron5 for an undisclosed sum. At the time of the purchase, Smartrong5 was only making games for the China-based social network Tencent, and as of this writing, has no apps on Facebook. As for 6waves Lolapps, the purchase had no discernible impact on its user activity as tracked by AppData. As a publisher, the company now has 11.8 million MAU and 1.8 million DAU.

DeNA acquires Atakama Lab – October

DeNA acquired Chile-based social game studio Atakama Labs, creators of the retro RPG Little Cave Hero, for an undisclosed sum. While this move and ngmoco’s Lionside acquisition suggest DeNA’s commitment to Facebook development, we haven’t seen much movement in the games themselves. Little Cave Hero went into steady decline just before the acquisition and appears to have been sunsetted just after the acquisition.

EA acquires KlickNation for $35 Million – December

EA bought the Superhero City developer for about $35 million, according to Inside Social Game sources, and folded into the social game arm of its BioWare studio. Given the developer’s history and EA’s previous Facebook efforts with BioWare game Dragon Age 2, we expect to see KlickNation producing titles that draw from BioWare’s IP library. KlickNation’s existing roster of Facebook games currently have a total of nearly 400,000 MAU and moderately strong engagement at 15% DAU/MAU.

Zynga acquisitions in 2011

Leading up to its IPO in December, Zynga made a number of game-related purchases through 2011, at least eight of which were publicly announced or confirmed.

In January, Zynga bought Area/Code, developer of CSI: Crime City, for an undisclosed sum. At the time of the purchase, the game had about 2 milllion MAU, with growth trending downward, now standing at about 1 million MAU with relatively high engagement rates between 15 and 19%.

In April, Zynga made a talent acquisition from UK mobile game developer Wonderland Software, using the new hires to create Zynga Mobile UK. Zynga also acquired talent from poker industry service provider MarketZero that month.

In May, Zynga acquired DNA Games, developer of Casino City and other titles. The developer sunsetted all three of its Facebook titles shortly after, despite consistent performance from Casino City.

In August, Zynga is believed to have bought Astro Ape Studios to strengthen its mobile development efforts.

In November, Zynga’s IPO filings revealed the company had spent $20 million acquiring four companies in Q3 2011. Among them was development studio Five Mobile, bought in July and renamed Zynga Toronto. Among the other three are believed to be Astro Ape Studios (see above), with the remaining two unidentified.