GameStop to buy Flash game hub Kongregate
Game retailer planning purchase of free-to-play social gaming destination; deal expected August 1, cofounders to retain leadership positions.
GameStop is the largest video game-specific retailer in the world. It owns over 4,500 brick-and-mortar locations globally, but the company's next effort lies in the digital gaming space.
The Grapevine, Texas-based company today announced that it has entered into an agreement with Flash game portal Kongregate to acquire the company and make it a wholly owned subsidiary of GameStop Corp. The acquisition cost was not disclosed.
The terms of the deal state that the casual game space's cofounders, Jim and Emily Greer, will retain their leadership positions at the company's San Francisco office. The agreement is currently scheduled to be finalized August 1.
Additionally, GameStop CEO J. Paul Raines said the acquisition will help his company push digital gaming by providing a "gaming platform for casual, mobile and browser games that can be promoted and played by our existing gamers."
Kongregate launched in 2007 and since that time has amassed 10 million monthly users who spend about 23 million hours a month on the Web site. The site currently houses thousands of free-to-play Adobe Flash-based games from over 8,500 developers in a number of genres. GameStop will not rebrand Kongregate and will allow the company to keep its URL. Additionally, its Web site will be fully integrated with GameStop's.
Although the cost of the acquisition was not revealed, Wedbush analyst Michael Pachter estimated it to be between $12 million and $40 million. As of press time, GameStop shares were trading down 1.2 percent to $20.49.