Playdom is a social gaming company that has acquired another gaming company called Offbeat Creations. The terms of the deal were undisclosed. Offbeat Creations develops a popular application called Super Farkle. Playdom’s line of games include Sorority Life, Mobsters 2, Tiki Resort, etc. Playdom raised $43 million and has a $260 million valuation. [TechCrunch]
Christa Quarles was a research analyst with Thomas Weisel. However there is a report that she has joined social gaming company Playdom as the company’s new CFO. Last year Quarles was ranked the fifth best brokerage analysts by Forbes. This indicates that Playdom is either interested in a buyer or is planning to go public sometime in the near future.
Playdom competitor Playfish sold to EA for $400 million. Another Playdom competitor Zynga.com is making hundreds of millions in revenues every year. Playdom’s business model has been proven by these two rivals. Playdom themselves raised $43 million in funding. The company is also inching towards $60 million in revenues this year.
Playdom Raises $43 Million, Receives $260 Million Valuation, Buys Out Trippert Labs and Green Patch Inc.
Playdom is one of the biggest competitors of Playfish, a virtual application company that was acquired by EA for $400 million earlier this week. Given that Playdom is one of the very few remaining large virtual application companies, investors want to get in on their business model. Playdom raised $43 million based on a $260 million valuation.
In terms of revenue, TechCrunch speculates that they are making $60 million per year. The participants in the $43 million round of funding was Lightspeed Venture Partners, Norwest Venture Partners, Rick Thompson, and New Enterprise Associates.
While Zynga and Playfish focus on Facebook for selling virtual items within game applications, Playdom focuses more on MySpace. Mob Wars has about 14 million users on MySpace and the company as a whole has about 28 million monthly game players. About 60% of the traffic is from MySpace and 40% is from Facebook.
In terms of payments, Playdom makes 70% from direct payments, 10% from advertising, and 20% from third party offers. Playdom is based out of San Francisco and doubled their employee count over the last couple of months to 110 people.
Now that Playdom has a lot more money in the bank, they have decided to go on an acquisition binge. Playdom acquired Green Patch Inc., a Facebook application company and Trippert Labs, an iPhone application company. Green Patch made a garden simulation application on Facebook and has about 1.5 million monthly application users. Trippert Labs created several iPhone applications such as MobAir: Pilot Training and Blowfish.
Many people believe that Facebook applications are losing appeal, but games made by Zynga are a major exception. Zynga has already banked on games such as Texas Hold’Em, Mafia Wars, and FarmVille. Now the social gaming company has another hit on their hands called Café World. Café World hit 10 million users in just one week.
How did Zynga do it? Cross-promotion. They linked Café World through FarmVille, a game that already has 56 million users according to AppData. Zynga has been making money by selling virtual goods in their games. Zynga will be making about $200 million in revenues this year alone according to Eric Eldon of Inside Social Games.
While Zynga is making a lot of revenues, one of the ways that they are making games is by taking ideas from others. FarmVille is considered to be a replica of FarmTown and Cafe World appears to be similar to Playfish’s Restaurant City.
Zynga is currently in a legal battle against another social gaming company called Playdom over company secrets. Four former Zynga employees are being accused for giving secrets to Playdom.
As I sit at home on a Saturday afternoon watching my team Michigan State University take a beating from Mac team Central Michigan University, I thought about the competition that Playdom and Zynga are having. Instead of taking it to the football field, Zynga and Playdom are taking their competition to the court room.
This past year, Zynga sued Playdom over misleading advertising. Zynga claimed that Playdom was comparing their game Mobsters to Zynga’s Mafia Wars game.
This past year, Zynga sued Playdom over misleading advertising. Zynga claimed that Playdom was comparing their game Mobsters to Zynga’s Mafia Wars game. Playdom changed around the advertising campaign since then, but now this past week Zynga sued Playdom and several other defendants again. This time it is over breach of contract, stealing trade secrets, intereference with contracts, etc. Four former Zynga employees were named as the defendants along with several other Playdom of secrets.
Supposedly Playdom hired some of Zynga’s employees and those employees took some trade secrets and other proprietary documents. One of the documents was the Zynga Playbook which has a list of techniques, game behavior, customer behavario, etc. Another ex-Zynga employee stuck 70 files on a USB storage device a couple of weeks before joining Playdom. More details as the story develops.