That the mobile and social games market is profitable is no longer a question. It’s now about when investors start getting in on the action. If everything goes according to plans (and if certain rumors turn out to be true), the answer is sooner rather than later.
Last week, one of the sector’s first real success stories, PopCap Games, confirmed that it will make its initial public offering in the next year — and possibly as soon as November. Given the popularity of its titles like Bejeweled, and the fact that the company’s revenue grew 25% in2010, an IPO should draw plenty of interest.
So who else is next? These three social and mobile game makers are likely the next group to go public:
According to a Tuesday report at All Things Digital, one of the more recent stars of the market is set to go public as well. Farmville and Mafia Wars creators Zynga Games is expected to announce that they’ve filed for an initial public offering sometime in the next seven days. The company just finished a round of funding that brought in just under $500 million on May 6 and the company’s value is estimated at $10 billion. Zynga will likely price itself above that in its offering.
This Finnish company is arguably more famous than both Zynga and PopCap, thanks to the irrepressible popularity of its game Angry Birds. Available on almost every device from Apple’s (NASDAQ:AAPL) iPhone to Facebook, Angry Birds has been downloaded more than 200 million times since it was released at the end of 2009, and that includes both paid downloads and free, advertising-supported versions like the one on Google (NASDAQ:GOOG) Android phones. CEO Mikael Hed suggested to Reuters on May 18 that Rovio may wait two to three years before going public, but if it can produce another Angry Birds by the end of 2011, an IPO may come much sooner.
Before RenRen (NYSE:RENN), Kaixin was the so-called Facebook of China. The social network rose to prominence after opening in 2008 thanks not to a bubbling community of Chinese citizens looking to connect online but addictive games like Friends for Sale and Happy Farm, games that imitate Zynga’s popular creations in more ways than familiar titles. The service boasts a user base of 50 million, nearly double that of RenRen. If Kaixin goes public, it may be one more Chinese technology stock to bolster a portfolio. Investors should be cautious, though — RenRen opened big but shares have deflated quickly.