Crowdstar Breaks Talks With Microsoft Regarding Acquisition

CrowdStar, a leading social games company with nearly 50 million monthly active users, recently broke off talks to be acquired by Microsoft Corp. The deal was rumored to be in the $200 million range, according to a report by BusinessWeek. CrowdStar is said to be actively looking for new companies to work with on a deal.

CrowdStar has one of the largest games on the social gaming scene with Happy Acquarium, a pet raising game that takes place within a virtual acquarium. The game utilizes high production Flash graphics, virtual goods and virtual currencies.

The U.S. market for games played on social networks, including Facebook and News Corp.’s MySpace, will triple to more than $2 billion by 2012, according to ThinkEquity LLC. The growth contrasts with a 9.8 percent drop last year for U.S. purchases of games played on Nintendo Co.’s Wii, Microsoft’s Xbox 360 and Sony Corp.’s PlayStation 3, NPD Group Inc. said.

Microsoft’s potential entry into social games is garnering speculation around the web. There are guesses that they may be planning to somehow integrate this gaming into their existing XBox Live service, which has over 23 million users. Microsoft also runs MSN Games, a games portal which has over 1,000 online games and recently integrated a version of Zynga’s Farmville. There’s no doubt that big players are getting into the game, with EA recently acquiring Playfish for approximately $400 million, so it’s not unreasonable to see Microsoft jump in as well, although the company has typically stayed on the platform side of gaming, rather than the games themselves.

Publish date: April 1, 2010 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT