[Nirolak]

It seems that Microsoft may be trying to buy CrowdStar, and perhaps for $200 million.

CrowdStar is best known for the facebook game Happy Aquarium.

Feb. 11 (Bloomberg) -- Microsoft Corp. is among companies in talks to buy CrowdStar, the creator of games for social- networking site Facebook, according to two people familiar with the matter. A decision on a sale may be weeks away, and closely held CrowdStar might choose to stay independent with investment from a private equity firm, said one person, who declined to be identified because the talks are private. CrowdStar, whose offerings include the virtual fish-care game “Happy Aquarium,” may be valued at $200 million, the other person said. Games on Facebook gained popularity in the U.S. last year, prompting Electronic Arts Inc. to purchase Playfish Inc., the maker of “Pet Society” and “Restaurant City,” for as much as $400 million. CrowdStar is the fourth-largest developer of applications for Facebook Inc.’s social network, with more than 50.8 million monthly active users, according to AppData.com, a Web site that tracks application usage on Facebook. Peter Brooks, a spokesman for Burlingame, California-based Crowdstar, declined to comment, as did Microsoft General Manager Mike Ybarra, who heads the company’s Windows games unit. The U.S. market for games played on social networks, including Facebook and News Corp.’s MySpace, will triple to more than $2 billion by 2012, according to ThinkEquity LLC. The growth contrasts with a 9.8 percent drop last year for U.S. purchases of games played on Nintendo Co.’s Wii, Microsoft’s Xbox 360 and Sony Corp.’s PlayStation 3, NPD Group Inc. said. MSN Games MSN Games, a unit of Redmond, Washington-based Microsoft, offers more than 1,000 online games, including “Bejeweled,” “Mah Jong Tiles” and “Spades.” The Web site competes with services from Yahoo! Inc. and AOL Inc. This month, Zynga Inc. began letting users of Microsoft’s game site play its “FarmVille” game. San Francisco-based Zynga has more than 232 million monthly active users, according to AppData. Valuations for Zynga and its peers were established when Electronic Arts bought Playfish, Jesse Divnich, an analyst with researcher Electronic Entertainment Design & Research, said last year. Zynga may be valued at $1 billion should the company be taken public, said Terry Schallich, head of capital markets at Pacific Crest Securities, a technology-focused investment bank. Games on social networks such as Facebook and MySpace are free. The makers of the titles generate revenue by selling virtual goods. Microsoft’s Xbox Live online game service, which allows players to access their Facebook accounts, has about 23 million users. The company is trying to develop more online and community-based games, Phil Spencer, the vice president of Microsoft’s game studios, said in July. Microsoft rose 13 cents to $28.12 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have fallen 7.7 percent this year.

Source: http://www.bloomberg.com/apps/news?p...d=aUYXtsK5u5uw

Microsoft seems intent on making a big entry into the social games space. The company announced a week ago that it would bring titles from social game giant Zynga to its online properties, including MSN and Windows Live Messenger, and now Bloomberg reports that Microsoft is in talks to buy CrowdStar, the social game company behind the Facebook hit Happy Aquarium. CrowdStar hasn’t gotten the attention of Zynga or Playfish but it’s the fourth biggest developer on the social network, according to AppData. And Happy Aquarium, which launched only last fall, is the sixth most popular game. Microsoft hasn’t been much of a force on the online gaming market—a contrast to the company’s historical success with video game titles and desktop games: Its MSN Games online portal has slipped in popularity over the last year, according to comScore, even as overall online gaming has jumped. A notable exception has been its online gaming service for the Xbox 360, Xbox Live. Two-year-old CrowdStar has taken a different approach than rivals like Zynga and PlayFish. Rather than focus on putting up big revenue figures, it has instead focused on being profitable and this fall was making about $1 million a month in profits. In an interview with InsideFacebook earlier this year, CrowdStar Chairman Peter Relan said the company only had 20 employees (By contrast, Zynga has more than 600). The company has been able to keep its staff roster down in size by only making money via the direct sale of virtual goods, instead of with in-game ads or offers, according to Forbes. In a sign of the ballooning valuations being put on social games firms, CrowdStar is reportedly being valued at $200 million; over the last several months, Electronic Arts has bought Playfish for $275 million upfront, in addition to a $100 million earnout, Playdom raised cash at a $260 million valuation, and Zynga got $180 million in a round. A sale of CrowdStar at $200 million would represent quite a return for its investors; the company has raised less than $100,000 in funding from its chairman. Microsoft says it doesn’t “comment on rumors or speculation.”

Source: http://www.industrygamers.com/news/m...ker-crowdstar/

[graywolf323]

Happy Aquarium, which launched only last fall, is the sixth most popular game.

please be joking

[Mad_Ban]

Can't be any worse spent than the $370m they doled out on Rare.

[Averon]

Can't be any worse than the $200m they spent on Rare.

Wasn't it $350 million?

[Jet Grind Radio!]

Farmville for XBLA confirmed?

[Y2Kev]

I want Sad Aquarium

[HallucinatingElvis]

Can't be any worse spent than the $370m they doled out on Rare.

hur hur hur

[Nirolak]

I want Sad Aquarium

[IMG]http://i45.************/25f3bqg.jpg[/IMG]

[spidye]

Can't be any worse spent than the $370m they doled out on Rare.

:lol
shots fired!

[SecretBonusPoint]

Hopefully one of those cases where the rumours are what the company itself starts to facilitate such crazy offers, at least I'd like to think so what with 200 million for such a low-fi operation is well beyond the realms of sanity.

[bryehn]

Farmville for XBLA confirmed?

Different company.

Plus, this makes total sense and it's a great deal compared to trying to get Zynga.

[Vic]

Who?

[Caesar III]

Live Anywhere pls! Play your Halo Facebook App Game with Achievements on your Windows Phone :lol

[Fragamemnon]

cash for trash. at least rare provided some attention-getting launch titles for the 360.

[LordPhoque]

:lol :lol :lol

[bryehn]

cash for trash. at least rare provided some attention-getting launch titles for the 360.

It's all about advertising and microtransaction potential. Huge userbase with disposable income.

Zynga just released a $40+ DLC for FarmVille and people are buying it.

[p_p_o_d]

seaman natal confirmed?

[ghst]

i swear i saw that game on a windows shovelware tree in asda circa 1996.

[Grecco]

Farmville for XBLA confirmed?

Id play farmville if i could get some achievements.

[Maztorre]

I don't understand the $200 million outlay. The formula for success with Facebook/social games is so obvious and easy to repeat that Microsoft of all companies should be able to hire the same calibre of talent for a fraction of the cost, and make huge amounts of headway in this market by piggybacking it onto the XBL service.

I've yet to read positive industry news this past couple of weeks out of any company besides Nintendo. What the fuck is wrong with these companies?

[Tobor]

Facebook and mobile, guys. That's the future. MS is smart to get on board now.

[lordfroakie]

Can't MS buy something less useless? :/

[bryehn]

I don't understand the $200 million outlay. The formula for success with Facebook/social games is so obvious and easy to repeat that Microsoft of all companies should be able to hire the same calibre of talent for a fraction of the cost, and make huge amounts of headway in this market by piggybacking it onto the XBL service. I've yet to read positive industry news this past couple of weeks out of any company besides Nintendo. What the fuck is wrong with these companies?

I`d have to assume that they would take control of Happy Aquarium and any other IPs this company may have.

I do appreciate the point about Microsoft having a run at the market themselves though.

[VALIS]

Facebook and mobile, guys. That's the future. MS is smart to get on board now.

I'd change that to "browser based and mobile," but yeah, it is.

[duk]

ohh boyyyy, nice move if true

crowdstar had a great biz plan

[CadetMahoney]

cash for trash.

sign me up.

[Struct09]

Congrats to the founders of CrowdStar, sounds like they got their business model down.

[Maztorre]

Congrats to the founders of CrowdStar, sounds like they got their business model down.

Sad that "generating profit" is a novel business model in the games industry these days.

[omg rite]

Can't MS buy something less useless? :/

Do a little more research before calling something useless.

[StoOgE]

Yeah, I don't see any sense in buying this company.

These sort of games come and go in popularity. If you are buying the developer, what's the point.. anyone can put out this sort of game.

If you are buying the IP, what is the point? What if someone had layed out 100 million for the vampire or zombie games a few years ago. No one plays that shit anymore.

Jesus, why didn't I get into making shitty social networking games that require microtransactions to do anything? Make fun of MS points all you want, these games are the equivalent of Blizzard charging you real world money for equipment in WoW.

[spwolf]

I don't understand the $200 million outlay. The formula for success with Facebook/social games is so obvious and easy to repeat that Microsoft of all companies should be able to hire the same calibre of talent for a fraction of the cost, and make huge amounts of headway in this market by piggybacking it onto the XBL service. I've yet to read positive industry news this past couple of weeks out of any company besides Nintendo. What the fuck is wrong with these companies?

you have company with 20 employees making $1 mil per month in profits, and that is not good news to you? What the fuck is wrong with you?

[StoOgE]

you have company with 20 employees making $1 mil per month in profits, and that is not good news to you? What the fuck is wrong with you?

Right, and typically companies are bought at 7x their annual profit. So this is probably a bit overvalued.. likely because people are expecting explosive growth in this space.

but the larger question is, do you think they will continue to generate that kind of income for 7 years? I for one don't.

Some other social networking game will replace happy whatever the fuck and farmville in 6 months. It's like the myspace purchase to me. Online userbases can be very fickle and move on with little notice.

In order to make it big with one of these social networking ventures you have to catch lightning in a bottle... problem being it is very hard to know when and why people will move on from it. Most likely you will see the early adopters move on from Farmville because "uncool" people started playing it. These early trendsetters will aggregate to some other game, and the followers will move over to it over the next 24 months.

I just don't see long term value in any of these IPs.

[Lord Error]

Facebook and mobile, guys. That's the future. MS is smart to get on board now.

I don't think big screen entertainment is going anywhere. It just doesn't make any sense.

[Linkified]

I don't know how much money this company can generate per basis on a the facebook, got no idea - but if this is anyway helps create generate extra cash to offset production of 360 games got no problem. A Halo facebook game I wonder how much money that could generate?

[StoOgE]

I don't think big screen entertainment is going anywhere. It just doesn't make any sense.

It makes sense because the games cost next to nothing to develop and their are hordes of "non gamers" that will play these things for hours a day. Better yet, many of these people get so addicted to the game that they will hand over real money for in game assets on a microtransaction basis. 2-3 bucks here and there over a million person userbase and suddenly you are hauling in millions a month for very little work.

My concern isn't the business model, it is the long term outlook for any given "game".

[Tobor]

Right, and typically companies are bought at 7x their annual profit. So this is probably a bit overvalued.. likely because people are expecting explosive growth in this space. but the larger question is, do you think they will continue to generate that kind of income for 7 years? I for one don't. Some other social networking game will replace happy whatever the fuck and farmville in 6 months. It's like the myspace purchase to me. Online userbases can be very fickle and move on with little notice. In order to make it big with one of these social networking ventures you have to catch lightning in a bottle... problem being it is very hard to know when and why people will move on from it. Most likely you will see the early adopters move on from Farmville because "uncool" people started playing it. These early trendsetters will aggregate to some other game, and the followers will move over to it over the next 24 months. I just don't see long term value in any of these IPs.

You're making a lot of assumptions here. You think these companies don't have a development roadmap? They're not throwing darts at a board to see what sticks, these guys have real world experience in catering to and maintaining large social gaming groups successfully. That's valuable right now.

Of course they'll move on from Farmville at some point, and the smart companies will have product waiting for them.

[Fragamemnon]

Commodification is happening too rapidly in the facebook gaming space. Unless they showed off some seriously awesome stuff to interested parties in private, this is a waste of cash.

[Jin34]

A Halo facebook game I wonder how much money that could generate?

That loud scream we just heard came from the Halo Reach thread.

[Tobor]

I don't think big screen entertainment is going anywhere. It just doesn't make any sense.

No, but it's not a growth market anymore, and the ROI potential in casual gaming is through the roof.

[GillianSeed79]

Facebook and mobile, guys. That's the future. MS is smart to get on board now.

*In Charlton Heston voice*

Damn you! Damn you all to hell!

Seriously, screw you interwebs and magic cordless phones with picture screens, you are killing me.

[Cday]

Microsoft Looking To Buy CrowdStar, Perhaps For $200 Million

the creator of games for social- networking site Facebook

[IMG]http://i49.************/24errd3.jpg[/IMG]

[Zeitgeister]

okay, one quick question: why?

[REMEMBER CITADEL]

Farmville for XBLA confirmed?

Wrong company, but it is coming to MSN Games.

[Dreamgazer]

okay, one quick question: why?

what why?

CAUSE WE GOT THE MONEYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY~:D

[Dr. Kitty Muffins]

Can't MS just start up their own little Facebook gaming company and beat them out while saving a ton of cash? It isn't like Facebook gaming is currently great or anything. It shouldn't be hard to compete.

[Thai]

lol, it's all over! sell your 360s!!


x360 is becoming teh casual!

[xbhaskarx]

In an interview with InsideFacebook earlier this year, CrowdStar Chairman Peter Relan said the company only had 20 employees

So if they do sell for $200 million that would be $10 million per employee...
Or are they paying for all their well established surefire money-making IPs?

[[Nintex]]

MS should just pump that money into Rare, add more teams and designers and watch the magic happen.

[Revelations]

This is a bad decision....

[mescalineeyes]

how do these facebook games even make money? is this in-game dlc stuff that they were talking about in this week's bonus round really such a strong money-making vehicle?