Video games developer FXLabs Studios has taken over US-based casual games portal knibble.com in an all-stock deal equivalent to $3 million.
HYDERABAD: In the first acquisition of its kind, video games developer FXLabs Studios has taken over US-based casual games portal knibble.com in an all-stock deal equivalent to $3 million.
What is interesting is that knibble.com, established by Interactive Media Technology Inc, is an aggregator of online games and is just six months old and claims to have a repository of over 10,500 games.
“With this, FXLabs will make an entry into the world of online games and it has already built in-house expertise to design and develop state-of-the-art casual games,” Shashi P Reddi, chairman, FXLabs, said while announcing the deal on Monday.
The acquisition makes FXLabs the only end-to-end gaming company in India, which is now seen as the fastest growing gaming country in the world, he said.
Set up by Reddi, the company has a $3 million investment by Suresh Productions and a few other VCs.
A Nasscom study on animation and gaming industry has put the worldwide gaming market (demand perspective) at $21 billion in 2006. This is expected to reach $42 billion by 2010, growing at a compounded annual growth rate (CAGR) of nearly 18% over 2006-2010.
According to a study by tech research firm IDC, online games in the country are likely to grow 11-fold to more than 14.9 million in 2011 from the mere 1.3 million in 2006 — a CAGR of 63%.
The total subscription revenue was $1.22 million in 2006 and is expected to be around $72 million by 2011 — a CAGR of 126%.
The entry of big players will only help grow awareness and expand the market, leading to increasing spends, according to IDC India.
“While the Indian market is at a takeoff stage, we are now in a predominant position to tap this when it actually happens,” Reddi, who is also the founder of software testing company AppLabs, said.
Compared to the 10,500-plus games on FXLabs.com, Zapak.com, the gaming portal promoted by Reliance ADA group, has just 400 games, Reddi said.
Apart from the aggregated games, FXLabs will also launch 250 casual games of its own in the coming days, said Sashi Chimala, founder & CEO, Interactive Media Technology Inc, which owned knibble.com, before the acquisition.
Meanwhile, FXLabs will launch at least three game titles, including Dhoom 2.5 for the console and PC market in India. While its first console/PC title, Agni, will be launched sometime in January-February, Dhoom and Archie Riverdale Run will be launched in June-July, Reddi added.
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