GamesBeat

Updated: Is PopCap being bought for $1B?

PopCap, a game developer that focuses on casual quick-hit style games like Plants vs. Zombies and Bejeweled, might be in talks to be acquired for more than $1 billion, according to TechCrunch.

PopCap is an appealing target for almost any game company because it has several extremely popular games that can be turned into franchises. The company also has a large number of regular users who purchase games from the company, and it is expanding into social gaming with games like Bejeweled Blitz. It’s a rare company that draws gamers from all audiences — social, casual, mobile and hardcore gamers.

The company recently acquired the San Francisco-based social game developer ZipZapPlay and said it was planning to go public later this year. It was one of PopCap’s more aggressive moves as the company aimed to be more competitive in social games on Facebook, where social gaming company Zynga dominates.

But PopCap’s soon-to-be customer engagement leader Jennifer Kye said the rumor was unfounded. Kye said her boss confirmed to her that the company was not planning to sell to any other company for $1 billion.

@MrPope Sorry, I might not have been clear. I was simply stating that @TechCrunch‘s article is not true,” Kye said on her Twitter account. “I’ll be working there next week! My boss confirmed it for me.”

When contacted directly by VentureBeat, PopCap did not give any comment as to whether the rumor about the buyout was true or not.

“Per company policy we do not comment on rumor and speculation of this type,” PopCap spokesperson Garth Chouteau said over the phone.

An unlikely candidate for the purchase is Zynga, which has wildly popular social games like Farmville and CityVille. The company has also been on a spending spree — its huge user base has allowed it to buy 12 companies in 12 months. The company already has 259 million monthly active users. Other possible suitors could be Japan-based DeNA, which focuses on social games and has taken aim at Zynga. DeNA has been growing at a blistering pace and could be on track to unseat Zynga as the top developer of social games for mobile devices.

“Zynga, I’m not too sure they want to spend a billion dollars, and by acquiring this, what are they getting out of it?” said ThinkEquity research analyst Atul Bagga, who focuses on digital media and online gaming. “They’re getting 2 IPs — don’t get me wrong, IPs are very valuable, but they’re more on developing their own IPs, not buying their IPs.”

Game makers Electronic Arts and Activision Blizzard are unlikely suitors. EA already tried buying a social gaming company, and Activision Blizzard is focused mainly on hardcore gamers. There’s a chance a Chinese company might come in and try to buy PopCap, but those companies are usually pretty stingy when they make acquisitions, Bagga said.

“That leaves Japanese guys like DeNA and maybe a few media companies,” he said. “It won’t be Disney, obviously, though there’s a chance a company like Fox might be involved.”

PopCap reported more than $100 million in revenues last year and is one of the most successful independent game companies. Sales of Bejeweled made up about 40 percent of its revenues, and about 20 percent came from Plants vs Zombies, PopCap chief executive Dave Roberts told VentureBeat. But the company was born in 2000, long before the era of social gaming.

PopCap has been adapting to the rapid rise of Facebook games and has 16.3 million monthly active users on the site. PopCap has 4.3 million daily active users, or those who come back once a day, and it ranks No. 3 behind Zynga and Electronic Arts, according to AppData.

The Seattle, Wash.-based company was founded in 2000 raised $22.5 million in October 2009.


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