The mobile-gaming industry further consolidated as publisher In-Fusio acquired Thumbworks, a Tustin, Calif.-based provider of entertainment content.
Terms of the deal were not disclosed.
In-Fusio, a France-based specialist in the “connected gaming” arena, has established footholds in Europe and China. The company first moved into North America in late 2003 with the acquisition of U.S. developer Cybiko and hopes to further tap the American market with the Thumbworks deal.
“The U.S. is the next challenge for us,” said Gilles Raymond, In-Fusio’s co-chief executive officer. “Thumbworks has very good distribution channels through carriers in the U.S.”
Thumbworks’ portfolio includes titles branded by Jeep, Suzuki and Wilson, as well as a mobile Etch-a-Sketch offering. The company recently launched CellToons, a streaming animation channel available to Sprint PCS Vision subscribers.
Raymond said he hopes to use the acquisition to build different types of content around branded titles, comprehensively marketing offerings.
“When someone starts to play a game under a specific brand, very likely he will want to access some of the content around that brand,” he said. “That makes a lot of sense for the end user.”
The acquisition underscores a seemingly paradoxical trend-even as the mobile-gaming market experiences near-exponential growth, the number of publishers and developers is decreasing. A handful of established companies are gaining ground, using venture capital to snap up smaller players eager to team with a well-heeled suitor.
“There’s definitely a `caste system’ developing where smaller companies are courting the main players because there’s no more scraps falling off the table,” said Dave Mock, author and analyst of “The Qualcomm Equation.” “The handful of players that have access to capital can just pick and choose what they need from smaller outfits-be it titles and brands, channels, or regional exposure.”
The past year has been huge for publishers like Digital Chocolate, Mforma, Sorrent and In-Fusio as investors poured money into mobile gaming. Other competitors on the playground include THQ Wireless, Digital Bridges, India Games and Mobliss, to name just a few.
Jamdat Mobile Inc. raised $88 million in its initial public offering in October, then watched as its stock soared 41 percent in the first day of trading. More recently, Jamdat’s stock has fallen from a high of $34.86 to $19.49-which is still higher than the IPO price of $16-but the expectations surrounding mobile gaming continue. According to consultancy IDC, wireless gaming is poised to become the most lucrative wireless data application category, generating nearly $1.5 billion annually by 2008.
IDC said the key to massive uptake will be a shift away from single-player, device-only gameplay to virtual community-oriented gaming. Today only a sliver of the mobile-gaming population, casual players will come to dominate the market by the end of 2008, the report said.
The community gaming theme is quickly gaining traction as the industry seeks players outside the typical video-game demographic. The Game Lobby, a cross-carrier virtual gaming community offered by Sprint PCS and powered by M7 Networks, has become a popular place for gamers to meet fellow players, recommend titles and compare high scores.
Some developers are encouraging community gaming by hosting tournaments and posting scores on their servers. Several racing titles offer “ghost” cars that represent previous performances, allowing players to compete against each other on the same screen-if not exactly at the same time.
RF technology is allowing players to go head-to-head within certain proximities, and platforms like Nokia’s N-Gage allow players to compete in turn-based competitions like golf. And as technology improves, the possibilities for community-based gaming will increase dramatically.
“We think In-Fusio’s done a wonderful job with maximizing community potential” in gaming, said Craig Holland, former president of Thumbworks and now managing director for In-Fusio Inc. “We were looking for a partner who understood the community aspect of mobile gaming … We’re excited about the fact that the work we’ve done will be able to have tremendous international distribution channels.”
Indeed, carrier relationships are at a premium for publishers and developers, and the playing field will continue to shrink despite a growing demand for mobile games, said Mock. The writing is on the wall for smaller firms that have yet to gain a foothold or sell out to a major player.
“(Several well-positioned companies) will continue to get VC funding or have an IPO as necessary to grow,” said Mock. “I think the tier below the top players, though, will see less VC money and seek more partnerships or merger/acquisition alternatives. The bottom tier of small outfits that have little revenue and no-brand deals are dropping like flies.”
