SGN, Maker of "Cookie Jam", Acquires Rivals to Consolidate Market

SGN, makers of extremely popular match 3 game "Cookie Jam", has expanded their operations in a recent business move. The game company has acquired two new game studios, Fat Rascal Games Inc. and Kiwi; terms were not publicized. 

The Culver City company, led by former MySpace Chief Executive Chris DeWolfe, is in the midst of a host of takeovers. The LA Times reported that the reason behind these acquisitions is due to DeWolfe's belief that "he expects over the next decade that about 10 companies will control nearly all of revenue from mobile games, meaning companies outside that list will find it "tough to compete."

The expansion of the company also extends to SGN's mobile app catalogue. In order for the company to continue generating revenue and attracting new players, the company is planning to release five more games in 2016. DeWolfe has great expectations for these games, predicting that at least four of them would be commercial successes.

By gaining Kiwi and Fat Rascal, the SGN company moves into a new kind of gaming market. Whereas SGN's games are generally puzzle games, Kiwi's games are based on time limits or reaching specific goals to get further in the game. Fat Rascal's forte's are widespread - the company's employees have experience in different genres through their time at Electronic Arts, Microsoft Pop Cap, and Zynga.

SGN also has gained an additional 25 employees from Kiwi and 15 from Fat Rascal to add to SGN's 250 workforce. Kiwi's Palo Alto location and Fat Rascal's Seattle location also help SGN enter the market in those areas as well. According to the press release about the acquisition, SGN will now have development studios in Los Angeles, San Diego, San Francisco, Palo Alto, Seattle and Buenos Aires.

VentureBeat described some of the previous games that the two newly acquired companies are known for. "The founding members of Fat Rascal have produced popular titles such as Zynga Slingo, Matrix Online, and Hidden Chronicles. And Kiwi's team has previously worked on games such as Shipwreck, Chefville, Deep Realms, Gardens of Time, and City of Wonder." Kiwi and Fat Rascal have said that they would continue developing games in their areas of expertise.

SGN's expansion is helped in part by South Korean gaming company Netmarble's $130 million investment. Netmarble maybe thinking something might happen in the future along the lines of Activision Blizzard's recent acquisition. Last month Activision Blizzard purchased King Digital Entertainment, maker of "Candy Crush", for $5.9 billion.

Investment bank Digi-Capital has reported expectations of mobile gaming revenues to reach $45 billion by 2018. If DeWolfe is correct in his logic, there will be a lot of money to be had by not many people - a really good problem to have.