Playdom: Social acquisitions are slowing down
Saturated market will see less acquisitions at lower prices, says Pleasants, but Playdom continues to hustle
Playdom CEO John Pleasants has said that the social gaming business is becoming saturated and that the recent spurt of acquisitions for talent, independent developers and IP is beginning to slow down.
The company has itself bought up seven smaller businesses from independent developers like Three Melons to free-to-play brand Acclaim, but it was getting much harder for indie talent to make a mark in the growing sector.
"If you go back 18 months [and look at who] were making the top 25 games on Facebook, there were 14 indie companies. Today, that number is five," he told GamesBeat.
"There are 250,000 apps on Facebook. There are 250 games launching a day on Facebook. It is very difficult for small companies to break in. It’s near impossible. And in that context, the deals are cheaper. We are at a scale now where we are comfortable. I don’t think you will see a continued pace of acquisitions."
Comparing the current social games business to the "start of iTunes, the beginning of the Nintendo Wii, and the early days of web-based email", Pleasants said that 'social gaming' will continue to expand and thin out to five top players, including Playdom and current giant Zynga.
He said: "We still hustle. We don’t feel like we are winning the race. I don’t think any one company wins the race. I think a handful of companies will be in the front pick. There will be an A list, and we want to be firmly in the pack."
Pleasants expects games retail to move online, but home consoles will still exist, he said, with the evolution to digital sales complete within 5-10 years.
"It’s irreversible," he said. "I believe that console games will be distributed digitally, starting this year. Boxed product will not need to exist anymore in five to ten years.
"At that point, a publisher will have a connection to an individual rather than to a retailer. Once publishers have that, there is no reason they couldn’t continuously modify the products or change the way they charge for them. It is unstoppable. "
Playdom is still growing, said Pleasants, and he expects the social market to be worth around $5 billion within five years.
"We are in a race. There is a sense of urgency," he said. "I am as bullish as ever.
"In the West, it will go from a $1 billion market to a $5 billion market in the next four or five years. It’s a very fast growing business."