Chasing the Next Zynga

MySpace founder Chris DeWolfe's MindJolt goes on acquisition spree

Headshot of Emma Bazilian

With a profitable Zynga approaching a $10 billion valuation and headed toward an expected 2012 IPO, the race is on to claim other pieces of the the social and mobile gaming market it helped pioneer. The latest to do so: MindJolt, the game distribution company acquired last year by MySpace co-founder and former CEO Chris DeWolfe, which is going on an acquisition spree to build the company into what he calls a "triple threat" of gaming across Web, social media, and mobile platforms

DeWolfe told The New York Times on Monday that MindJolt—which already has a catalog of 1,300 games and a Facebook app with 10 million users—has purchased Social Gaming Network (SGN) and Hallpass Media. The purchases, DeWolfe said, were made with a combination of money that MindJolt raised from Austin Ventures last year, equity, and cash, and will effectively double the company’s staff to 80 employees.

SGN, founded in 2008, is a creator of several popular mobile games (with 30 million downloads to date) and has raised $18 million in funding from backers like Google’s Eric Schmidt and Amazon’s Jeff Bezos. Hallpass, an online gaming network, previously raised $2 million, and will add more than 4 million users and 1,500 games to MindJolt.  DeWolfe told TechCrunch that the SGN acquisition was part talent grab, part IP acquisition. “This expands our presence beyond just Facebook,” DeWolfe said, “and gives us a solid base in the mobile gaming arena.”

Part of DeWolfe’s plan in acquiring these companies is also to go after advertisers, he told All Things Digital. (MindJolt currently has a monetization branch called AdJolt.) Zynga has been hugely successful with its in-game brand campaigns, and DeWolfe wants to follow its lead. “With 25 to 30 million unique users, there’s a critical mass of users there,” DeWolfe said. “We can go to ad agencies and to top media buyers and integrate their brands into our games.”

DeWolfe also wants MindJolt to sell more virtual goods. “We are big on virtual goods as a revenue stream moving forward, but we didn’t have social games that lent themselves to virtual goods [before the acquisition of Hallpass],” he said. “Ninety percent of revenues before came from advertising, but we expect it be 50-50 in the next 18 months.”

Despite MindJolt’s major expansion, DeWolfe denies that his company is trying to compete with Zynga (which he called a “monster” in the mobile gaming field) or Electronic Arts, another major industry force. But DeWolfe is considering adding more, mostly smaller, acquisitions, and if all goes according to plan, Zynga and EA might not be the only gaming giants for much longer.

@adweekemma Emma Bazilian is Adweek's features editor.
Publish date: April 19, 2011 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT