GDC: 2007 Will Be Record Year for Mobile Games Funding, Acquisitions

Authored by Scott Goldberg on March 6, 2007 - 3:05pm.

San Francisco – Paul Heydon, Managing Director with Unity Capital, said 2007 is on pace for a record year in the mobile games industry, in terms of funding and acquisitions. In his Game Developers Conference (GDC) session entitled, “Mobile Games: A Strategic Review of the Sector,” Heydon said venture funding in mobile games startups could reach $210 million, spread over 30 deals, both of which would be records for the space. Six deals have taken place so far this year. He added that the market is on pace for 30 acquisitions as well, with five already occurring in 2007.

“Venture capital is very interested in the mobile games sector,” Heydon said. He cited the Electronic Arts (EA) acquisition of Jamdat as a crucial point in the market’s evolution, as it validated the space, Real Networks acquisition of Mr. Goodliving, the News Corp. purchase of Jamba, and Disney’s acquisition of Living Mobile as proof that big media companies are increasingly interested in mobile opportunities.

A young market, the first funding deals began only seven years ago, in 1999. While funding and venture capital interest was slow over the first four years, the past three have seen a huge influx of activity. Digital Chocolate was the biggest winner of the last year, receiving $22.5 million in funding. The investors with the largest appetites over the last seven years have been Qualcomm and Softbank Funds, each closing six deals since 1999.

There are currently four publicly held mobile games companies, according to Heydon: Gameloft, G-Mode, Superscape, and G5. Heydon estimated their total market value at about $600 million.

Scott Goldberg