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Zynga to acquire Small Giant Games, the maker of Empires & Puzzles, for $700M
Social game developer Zynga has entered into an agreement to acquire Small Giant Games, the startup behind the popular mobile game Empires & Puzzles, in a deal expected to total $700 million.
Zynga, which has tumbled since its 2011 Nasdaq initial public offering, will initially acquire 80 percent of Small Giant Games for $560 million, composed of $330 million in cash and $230 million of unregistered Zynga common stock. Zynga will fund part of the transaction with a $200 million credit facility.
“We’ve been impressed by the quality and momentum of Empires & Puzzles as we add another Forever Franchise into Zynga’s portfolio,” Zynga chief executive officer Frank Gibeau said in a statement. “Small Giant has created an innovative game that delivers a unique player experience that engages over the long term.”
The deal is expected to close on January 1. Zynga will purchase the remaining 20 percent of Small Giant over the next three years “at valuations based on specified profitability goals.”
Helsinki-based Small Giant Games had raised $52 million in equity funding from EQT Ventures, Creandum, Spintop Ventures, Profounders and others since it was founded in 2013. The company reported $33 million of revenue for Empires & Puzzles, its most popular game, 10 months after its launch in 2017. Small Giant, which is also behind Alliance Wars and Season 2: Atlantis, says they exceeded 2017’s revenue just four months into 2018.
“Our studio was founded on the idea that small, skillful teams can accomplish giant things, and I am confident that partnering with Zynga is the right next step in our evolution,” Small Giant CEO Timo Soininen said in a statement. “We will now operate as a separate studio within Zynga, maintaining our identity, culture and creative independence. By leveraging the expertise and support from the wider Zynga team, we will amplify the reach of Empires & Puzzles and the new games in our development pipeline.”
Zynga, founded in 2007, is the developer of FarmVille, Zynga
Zynga expects to bring in $243 million in revenue in the fourth quarter of 2018.
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Rare Bits launches a market for digital collectables
As we plunge into our baffling future, it is believed that, at some point, we will be trading in cryptographically secure kittens, monsters, and playing cards. While it is unclear why this will happen, Rare Bits and their new service, Fan Bits, is ready for the oncoming rush.
Co-founded by Dave Pekar, Amitt Mahajan and Danny Lee (who met after selling their gaming startups to Zynga) and Payom Dousti (formerly of fintech VC fund 1/0 Capital), the company trades in digital goods and has built a blockchain-based solution for buying and selling digital collectables. Lee brought in a team of ex-Zynga and other digital platform creators to build a blockchain-based solution for buying and selling digital collectables. For example, on Rare Bits you can buy this monster and battle it against other monsters on the blockchain. Further, with their new platform called Fan Bits, you can buy actual collectables that are tied to the blockchain. For example, you can sell collectible cards and give some of the proceeds to charity. If the new owner resells those cards then some of the resell price also goes to charity, an interesting if slightly intrusive use of smart contracts.
The team has raised $6 million in Series A. Fan Bits launches on May 17.
“To date, collectible content has only been created by developers for their own dapps – which I suppose could be considered our competition,” said Lee. “Fan Bits is the first to let anyone, especially people who are not technical, to create collectibles. It will create an abundance of supply that didn’t exist before.”
“We started Rare Bits to let people buy, sell, and discover crypto assets. We believe that assets on the blockchain mark a fundamental shift in how we own and exchange property. Our overall mission is to enable the worldwide exchange of online and offline property on the blockchain,” he said.
Lee sees this as a Trojan horse of sorts, allowing non tech-savvy creators sell digital art and designs online without having to understand the vagaries of blockchain.
“For creators, it’s a DIY platform to turn their content into unique collectibles and earn Ethereum on every sale,” he said. “For the first time, a creator can go from idea to published cryptocollectible on a live marketplace without having to have any technical knowledge.”
Given the popularity of other digital collectables – including in-game gear for many multi-player games – things look like they’re going to get pretty interesting in the next few years.
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