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Live Gamer's Buying Spree Continues: Acquires Twofish

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More consolidation in the in-game and social media commerce market — and it comes just as social media sites warm up to the idea of making money from virtual goods. Live Gamer has acquired rival virtual payments and analytics firm Twofish, in a combination cash and stock deal. Full financials weren’t disclosed, though Twofish’s backers (which include Venrock, Rustic Canyon Partners and TriplePoint Capital) will retain stakes in the new combined company.

This is Live Gamer’s second acquisition within the past four weeks; it acquired Korean in-game payments tech firm N-Cash in late July. Live Gamer gained a full-scale, multi-currency e-commerce platform out of that deal; with the Twofish acquisition, it gets a suite of social media-centric payment and analytics tools. And CEO Mitch Davis (pictured) said there could be more acquisitions — or at least news about previously undisclosed deals — on tap for Live Gamer later this year. “We haven’t announced all the pieces,” he said. “But we have been very acquisitive.”

Logic says Live Gamer’s next likely acquisition will be of a mobile payment provider, since that’s one of the few tools the company’s product roster is lacking. Live Gamer already powers the virtual economies for companies like *Sony* Online Entertainment and Acclaim; with Twofish’s platform, it can also appeal to the smaller, indie developers building social gaming apps.

Twofish President Lisa Rutherford (pictured) said the company’s revenue growth had been “doubling month-over-month” through the past year — a sign perhaps, that the Twofish team didn’t agree to the acquisition out of desperation. But it makes sense for in-game payments companies to try to scale out together, particularly as the market starts to get crowded.

Recent fundings include startups like Jambool and oneTXT; PayPal is trying to win over app developers with its new open payments platform, and networks like Hi5 and Facebook have rolled out their own e-commerce systems.

When I asked Rutherford how the combined companies planned to compete with bigger players like PayPal and Facebook, she said it was more about playing nice — and giving developers a data-backed view of which payment platform was performing best — than competing. “Ideally, a developer would use our analytics to figure out whether to drive sales through PayPal, or iTunes or Facebook,” she said. “We’ll sit back and work with them all while they battle it out.”