Last night, the Social Gaming Network (SGN) announced that they had acquired (fluff)Friends, one of the most popular applications on Facebook. How much was (fluff)Friends acquired for exactly? Well SGN made no formal statement but we speculate that it was somewhere in the millions of dollars range. For a company which recently raised $15 million in venture capital, it is somewhat surprising to hear the news.
Currently the biggest buzz sweeping the Valley related to Social Gaming Network is that they are in the process of suing Mobwars, one of the largest games on Facebook. The reason is that the application was started when the developer was still working at Freewebs in Silver Spring, MD. A number of developers from Freewebs moved out to California to start Social Gaming Network with Shervin Pishevar as CEO.
The company faces stiff competition, especially from Zynga who has so far been more successful at maintaining an active user base. The company also faces internal challenges as many developers have exited the company and there are few in house success stories. That doesn’t mean all is over for SGN. This most recent acquisition keeps the company on the application leaderboard.
The company also has an incredible board and an experienced management team. (fluff)Friends is one application which has proven to withstand the test of time and this acquisition definitely gives the company a more solid base. I think we may see the company continue to focus on increasing the base rather than churn out one-off applications which rise in popularity but fail to attract a lasting user base.
The company is also navigating what was previously uncharted territory less than a year and a half ago. With constant changes being made by all the social networks (including Facebook), it has proven to be a challenging area. My guess is that we will begin to see a shift as more traditional gaming companies move into this space. Congratulations to Mike Sego of (fluff)Friends. This was truly a smart acquisition by SGN. I’d expect to see more of these continue.