GameStop acquires Flash game portal Kongregate

28 Jul 2010

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The world’s biggest games retailer GameStop has acquired a leading Flash-based social gaming community for an undisclosed sum as part of its unfolding strategy to be a major force in online gaming.

Kongregate Inc. is a leading social gaming destination and community for core gamers representing the fast-growing free-to-play gaming market.

Currently, the site hosts 10 million monthly players who spend about 23 million hours per month on the site. Kongregate will operate as a wholly-owned subsidiary of GameStop Corp. and maintain its current offices in San Francisco, Calif.

The move comes just months after GameStop acquired a majority stake in Irish social gaming company JOLT, led by entrepreneur Dylan Collins who will develop GameStop’s digital media strategy going forward.

The Kongregate transaction is expected to close around 1 August, subject to customary closing conditions, with the company remaining under the leadership of its co-founders, Jim and Emily Greer.

Kongregate’s digital platform allows consumers to discover great free-to-play games that can be enjoyed via internet-connected devices. Acquiring Kongregate strengthens GameStop’s digital platform and its commitment to become the gaming aggregator of choice.

What the Kongregate acquisition means for GameStop

J Paul Raines, chief executive officer of GameStop, said: “Kongregate advances GameStop’s digital strategy by providing a gaming platform for casual, mobile and browser games that can be promoted and played by our existing gamers. We welcome the Kongregate team to the GameStop family.”

GameStop president Tony Bartel added: "Combining Kongregate’s expansive catalogue of games with our well-known consumer brand, powerful marketing and strong customer relationships, means that even more gamers will be able to enjoy their games anytime, anywhere and on any device."

Since launching its website in 2007, Kongregate.com has proven extremely popular with gamers who have embraced its more complex and robust Flash and web-based content, such as strategy, MMO, adventure, RPG and mobile games. Likewise, developers have found Kongregate’s revenue-sharing business plan attractive compared to the cost of developing their own turn-key platforms, with feature sets that provide a more full gaming experience.

GameStop’s scope

GameStop is the world’s largest video game retailer. The company operates 6,486 retail stores throughout the United States, Austria, Australia, Canada, Denmark, Finland, France, Germany, Italy, Ireland, New Zealand, Norway, Portugal, Puerto Rico, Spain, Sweden, Switzerland and the United Kingdom. The company also operates an e-commerce site, GameStop.com, and publishes Game Informer magazine, a leading multi-platform video game publication.

Jim Greer expressed his excitement regarding the acquisition: “To date, our company’s unique DNA has given more than 8,500 game developers the tools to make their games social, reach a huge audience and make money from over 30,000 innovative games.

“This includes access to virtual currency and robust community features such as leaderboards, player achievements, profiles, multiplayer, dedicated game forums, and a site-wide leveling system. Our community will only be enhanced with GameStop’s close relationship with millions of passionate gamers,” Greer said.

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com