I missed this entirely yesterday, but found this fascinating: Japan-based DeNA, a mobile gaming company, yesterday announced a deal to acquire ngmoco, a Kleiner Perkins-backed San Francisco-based mobile gaming startup, for up to $400 million in cash and securities. DeNA says it will now be “the world’s largest mobile social games platform company.”
Terms call for ngmoco holders and employees to get $300 million in cash and securities, with up to another $100 million based on performance milestones through December 31.
The announcement says ngmoco’s games have been downloaded more than 60 million times for Apple iOS devices; it plans to start offering Android games in the fourth quarter.
To put that in some perspective: long-time video game player THQ (THQI), which for the March 2011 fiscal year is expected to report more than $800 million in revenue, has a market cap of just $278 million. Take-Two (TTWO), which owns the Grand Theft Auto and Red Dead Redemption franchises, among other things, has a market cap of $930 million – about $800 million if you back out their net cash position – and should do $1.1 billion in revenue for the fiscal year ending this month. Electronic Arts (ERTS), which the Street sees reporting $3.8 billion in sales for the March 2011 fiscal year, has a market cap of $5.5 billion, but that includes more than $1.7 billion in cash and equivalents.
Meanwhile, over the summer Disney (DIS) agreed to buy social gaming startup Playdom for $563.2 million in cash – plus up to another $200 million based on performance.
What does it all mean? It means that the gaming business is going through a violent overhaul – the console gamers are slowing dying; social and mobile gaming is on the ascent; and the old guard are going to have transform, combine forces or risk slowly withering away.
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