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MySpace founders buy Mindjolt

By on March 3, 2010
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Rumours have abounded that Chris de Wolfe, the founder of MySpace, was about to make a major acquisition in the social games space.

He’s just done it.

Mindjolt website

Together with MySpace co-founders Colin Digiaro, and Aber Whitcomb and private equity firm Austin Ventures, he’s just acquired MindJolt, the #11 application developer on Facebook. It’s the sixth largest games developer behind Zynga, RockYou, Electronic Arts (by which I mean Playfish), Crowdstar and Playdom.


Is Mindjolt a developer? A publisher? Nope, it’s an aggregator

Mindjolt is an unusual beast within Facebook. It’s not a gaming company. It offers independent developers a platform for publishing their Flash games to the web, Facebook and a variety of other platforms. As the company puts it:

“MindJolt Games is the leading game portal for social networks.

By adding just a few simple lines of code to your game, you can use our API to leverage the social and viral aspects that are inherent to social networking. When you submit a game, it will appear on MindJolt Games on Facebook, MySpace, Bebo, Hi5 and Orkut, as well as mindjolt.com.

Leave the difficulties of integrating with each of the social networks up to us, so you can concentrate on the actual games themselves.”

It has over 1,300 games from 1,000 developers and monetises them through advertising, which it then shares with the developers. In other words, it’s a portal like Miniclip or Yahoo! Games; only it’s a portal that sits on top of a bunch of other social networks.

Death by a thousand cuts?

I have believed that the portal model is deeply challenged for several years now. Portals existed when:

  • distribution was tough (i.e. before Facebook games came along)
  • advertising was the primary revenue stream (i.e. before virtual goods took off in Europe and North America)
  • when developers had no other choices (see the two points above)

None of these are true now, and all the good developers I know are focused on understanding how to benefit from Facebook, not on letting another aggregator get between them and their customers, and taking a futher slice of revenue.

Which might make life tough for Mindjolt.

On the other hand, the company already has 20 million monthly users. Chris and his team said that they will focus on:

  • Increasing revenue through more ad sales and sponsorships, plus increasing the virtual goods part of the business
  • Increasing distribution to “all relevant websites and smart phone platforms”
  • Making life easier for game developers by creating tools for single player and multiplayer social games

All of this makes sense as they try to offer developers value as a “meta-meta-portal”.

TechCrunch says that Chris de Wolfe has been clear that he wants to follow a roll-up strategy that suggests Mindjolt is just the opening salvo in an acquisition spree. It also reports that Austin Ventures has a successful track record in roll-ups and “is backing him financially with an initial injection of capital that is rumored to be in excess of $20 million.”

That sounds like pocket change to me if they really want to do a roll-up to rival the valuations of Zynga (probably multiple billions) or Playfish ($400 million if they achieve their earnout).

But it’s a fascinating step in the ongoing consolidation of the social gaming market.

 

(Crunchbase gives a lot of details on Mindjolt. The new team has clearly just updated it today.)

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com