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Activision: social gaming company valuations “out of whack”

Activision isn’t ruling out expanding into the social gaming arena, but it appears unlikely to do so aggressively through buyouts. Speaking about the high market value of social game makers, Activision Publishing CEO Eric Hirshberg told Bloomberg: “Valuations of some of the companies in that space are out of whack, so that’s an issue when it comes to acquisitions.” The executive went on to say that while Activision may not have made any formal announcements on the subject of bringing its games to social networks, “any new place where people are playing games, at scale, is something that we’re interested in.” He added: “Don’t mistake careful, methodical planning for inaction.”

Source: Bloomberg

Comments

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jaks's picture
jaks says:
August 24, 2011 at 8.27am

I would agree with that. A lot of "social games" have yet to be properly monetized yet. People love playing those stupid Zynga Facebook games, but so far have been reluctant to spend any serious money on it. They still get most of their revenue from stupid venture capitalists thrown cash at them in unsustainable amounts. Zynga and EA keep throwing huge amounts of money into buying these companies who essentially make flash games that a billion people don't pay any money to play.

Eventually its going to turn into a late ninties dot-com-like bubble pop when the same idiots that invested in "the internet" back then start to realize they aren't getting any money back and pull the plug to invest back into oil companies or segways or whatever those morons do with their google money. It is getting to the point where these startups are popping up everywhere and making a very simple, passably entertaining game and giving it away for free and then putting their company up for sale once 20 million people download it. I'm sure if I boiled some weiners up and threw them in a wonder bread bun with some mustard and gave them away for free there's be a lineup around my block for them. That doesn't mean I can start selling them in a month for $10 each.

5 years from now it is going to be really interesting to see where these companies are at.