Well, it had to happen sooner than later…in U.S., VCs are finally beginning to see big money in mobile gaming, as adoption rises. As WSJ writes today, over the past few weeks a gaggle of mobile-game start-ups breezed through expansion and late-stage financing. They’ve left a line of eager venture capitalists at the door and in some cases accepted more money than entrepreneurs had planned.
Witness some statement made by CEOs of these companies.
— “It’s like the cannons got quickly moved over and sighted on this little segment of the world and started unloading,” says Greg Ballard, chief executive officer of cellphone game maker Sorrent.
— “The ability for a company to consolidate now, before the wind goes out of the sails, is here. Those types of opportunities only tend to be there for a very short period of time,” Mforma CEO Daniel Kranzler (Seattle PI)
— “It was role reversal,” says Sorrent CFO Paul Zuzelo. “We had VCs cold-calling us.” (San Jose Business Journal)
Keep in mind, most of these are me-too companies, with some hit titles and no guarantees of future hits. Also, mobile operators still have a huge share of the power in determining the fate of these companies. That is why the companies think they need scale…if we’re big, the telcos won’t push us around, the thinking goes. Plus we need an assembly line of hits in the rather fickle mobile gaming market, goes another line of thinking. That’s the same kool-aid VCs are drinking from as well.
As WSJ put is clearly, the mobile-game investments show a renewed willingness by venture financiers to back companies that aren’t built on a unique technology but rather are trying to grab a share of a fast-growing market. A similar approach spun out of control in the late 1990s.
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