Gamestop invests further in social games with Kongregate purchase

It looks like game retailer Gamestop's interest in social gaming no longer begins and ends with its promotion of subsidiary Jolt Online. That's because the retail giant has announced plans to purchase web-based casual gaming hub Kongregate.

While most of Kongregate's thousands of free-to-play Flash games are single-player experiences, the site has many elements familiar to more traditional social games, like chat rooms, achievements, friends lists and a site-wide leveling system. The site also has its own virtual currency, Kreds, which players can use to purchase in-game items and levels in some of the more popular Kongregate games. These social and community features have helped the site attract 10 million registered players who spend 23 million hours on the site every month.

The acquisition seems like a logical move for Gamestop, which must be worried sick about the effect downloadable titles and web-based social games could have on their bottom line. Every credit card dollar spent directly in an online game is one fewer dollar available for Gamestop's bread-and-butter $60 game discs, and selling a handful of in-game cash cards in stores won't stop the bleeding. By investing in companies like Kongregate and Jolt Online, Gamestop guarantees they'll at least have a foothold in the new gaming ecosystem if and when brick-and-mortar video game stores become as quaint and outdated as record stores and malt shops.

BigPoint CEO: Social game company sales values are "crazy"

$182 million. $300 million. $563.2 million. These are the kind of numbers that are getting thrown around casually in social gaming acquisitions these days, and they could go even higher, especially if industry-leader Zynga decides to sell out. But are these companies really worth as much as their buyers think they are?

As far as BigPoint CEO Heiko Hubertz is concerned, the answer is a definite "No." In an interview with GamesIndustry.biz the head of the online game publisher expressed extreme skepticism over the amount of money behind some recent high profile buyouts. "Just look at the Disney and Playdom acquisition," Hubertz said. "That was a crazy valuation from my point of view. We're also in the same segment and if you want to grow at the same speed as your competitors you cannot only grow organically, you have to buy other companies. In 12 months, maybe 18 months the prices will be more realistic and then we can look at buying more companies."
But are the prices so unrealistic now? That largely depends on what you think of the future prospects of social gaming. If you agree with Screen Digest's prediction that social gaming is going to be worth $1.5 billion a year by 2014, then investing millions for an established front-runner in the space doesn't seem so ridiculous. On the other hand, if you think social games are a fad that most players will soon grow tired of, those millions of dollars might as well be toilet paper.

Hubertz, for his part, is looking to zig where others are zagging by scooping up what he sees as struggling, undervalued publishers in the traditional console market. "In the traditional games industry, in the boxed industry, there are developers who are really struggling and they are not asking for high valuation, they are just asking for survival," he said. "We're looking exactly for these kind of developers because when it comes to high quality 3D games they have the experience. We can just give them another engine, they don't need to use the Xbox or PlayStation technology, they can use our web technology. They can still develop the same quality of game it's just for a browser."

Zynga cashes in on online poker stats site PokerTableRatings

"And we wonder why..." the Games.com writer typed with liberal snark as he stroked his long, Pai Mei-style beard. Alright, so I don't have a flowing white beard, but it's almost a given that Zynga's most recent acquisition of PokerTableRatings has something to do with its Zynga Poker game. TechCrunch reports that the company bought MarketZero, the company behind PokerTableRatings, so that its team could work on new features for Zynga Poker.

Our guess is that this new talent will work on improved tournaments and other competitive ranking systems. (Too much of a stretch?) While MarketZero and PokerTableRatings will continue operation, this marks the 11th buyout for the social gaming megalith in just under a year. Can Zynga make 12 acquisitions in one year? We're taking bets!

[Image Credit: Marie Clare]

How do you think Zynga will put this new talent to use? What type of company do you think Zynga should pick up next?