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Hasbro buys majority stake in Backflip

Hasbro buys majority stake in Backflip

Mon 08 Jul 2013 9:23pm GMT / 5:23pm EDT / 2:23pm PDT
MobileBusiness

Toy maker pays $112 million for 70% of mobile studio behind DragonVale, Paper Toss

Hasbro has a new toy. The company behind Transformers, Monopoly, and a slew of other entertainment properties has acquired a majority stake in Backflip Studios. The toy maker today announced a $112 million all-cash deal that sees it acquire 70 percent of the Colorado-based mobile game developer.

Backflip will continue to operate in the same location under the same management team, but it will expand its catalog of games to include some based on Hasbro intellectual properties in addition to its own original titles.

Known for games like DragonVale, Ragdoll Blaster, and Paper Toss, Backflip has been one of the biggest recent iOS gaming success stories. In April, Apple featured the developer in its quarterly earnings, saying the company was nearing $100 million in annual revenues, with about 95 percent of that coming from iOS products. All told, the company's games have been downloaded 300 million times.

"The acquisition of Backflip fits perfectly into our strategy of extending our brands into all forms and formats," Hasbro president and CEO Brian Goldner said of the deal. "As mobile play continues its rapid growth, Backflip's leadership position, great games and established network of users, makes Hasbro a more meaningful participant in digital gaming."

Hasbro expects the deal will be neutral to slightly accretive to its current fiscal year results.

4 Comments

Adam Coate
CEO & Founder

34 34 1.0
The company made nearly $100 million last year. Why would they sell 70% for about what they made in a single year? I don't really get it, but whatever floats their boat I guess. They must've felt they peaked with Dragonvale, which is probably true.

Posted:A year ago

#1
Having a $100M in revenue does not mean you make a huge profit, they might have spent most of that on development and user acquisition. So say they made $8M in profit, then selling for a company valuation of $160M seems pretty solid as that is a P/E of 20. They also saw a price multiple of 1.6 on revenue, so not to shabby.

Posted:A year ago

#2

Anthony Gowland
Lead Designer

168 492 2.9
Because their entire revenue is based off IAP in kids games, and they're trying to cash out before the backlash hits in full force?

Posted:A year ago

#3

Adam Coate
CEO & Founder

34 34 1.0
They don't have user acquisition costs because they cross promote within their free games like Paper Toss, Ninjump, etc (which also get them tens of millions in ad revenue per year). Their personnel costs are rather low as they have less than 100 employees.

Posted:A year ago

#4

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