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Games - Tuesday, July 27, 2010

Game Retailer's GameStop Hedges With Purchase of Online Gaming's Kongregate

Video game retailing giant GameStop is buying San Francisco-based Kongregate, a social gaming site. The purchase price was not disclosed.

Kongregate allows users to upload games they have created in Adobe Flash. Via its API, flash developers can integrate into their games which allows users to submit high scores and in some games, earn achievement badges. Badges and score submissions are only available on games whose developers choose to use the Kongregate API. The site was created in June 2006 by sister and brother Emily and Jim Greer who will continue to run Kongregate.

Kongregate says that more than 8,500 developers manage 30K+ games on the service.

Kongregate recently launched into mobile, singing a deal with Adobe to bring its Flash titles to the Android platform.

Kongregate earns 1/3 of its revenue through microtransactions and virtual goods sales, with advertising and sponsorships from brands making up the rest. Developers using microtransactions get 70% of revenues after they recoup their advance. Kongregate runs gaming events in brings in big sponsorships for those.

Last March, Kongregate told Gamasutra that its revenues were rising 30% each month, and said the company would be profitable in 2010.

Kongregate had raised $9M in 3 rounds from Greylock Partners, Bezos Expeditions and angel investors like LinkedIn founder Reid Hoffman.

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