Video Game Retailer GameStop buys Kongregate
What do a video game retailer and a social gaming community have in common? Nothing, except for being the same company now. But as GameStop states, with this unexpected akquisition they are trying to become the “gaming aggregator of choice”. Although Kongregate is now a 100 % subsidiary of GameStop, ownership of the site still remains in the hands of founders and siblings Emily and Jim Greer.
Is this the first step from GameStop to concentrate on new business in the future? If yes, this can be considered a wise decision, for “oldschool” game retailers will have a hard time in the future, where publishers will more and more focus on digital distribution. Furthermore GameStop earns a good amount of money by selling used games. They buy those for a more or less good price from gamers and sell them with a pretty big margin.
But big publishers like Electronic Arts amongst others are planning to put the kibosh on the used game market, because they don’t make any money, if a gamer sells his used game to another person. If the industry is pushing this idea, it will be a hard time for GameStop as one of the biggest games retailers in the world.
So maybe it is time to conquer new markets. And maybe that’s the reason, that GameStop already akquired JoltOnline.com in late 2009. JoltOnline is a browser games publisher from North America with such big names as Playboy Manager or Hattrick.
With the recent akquisition of Kongregate, GameStop bought one of the biggest names in the casual gaming area, counting 10 million players every month. With the help of investors and business angels, Kongregate was able to raise 9 million Dollars to realize their idea of a social gaming community. Among these investors is Reid Hoffman, founder of the business network LinkedIn.
We will keep an eye out for future akquisitions and mergers in the casual games industry.