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Will 2016 Be The Year of Deals in The Mobile Gaming Industry

DELRAY BEACH, FL / ACCESSWIRE / December 17, 2015 / As the mobile gaming market continues to expand and the objectives of like-minded companies cross over, acquisitions and mergers have become commonplace. Since 2012, consolidation in the game industry has skyrocketed, topping $4 billion that year, with headline-grabbing new deals surfacing all the time. In the 1st quarter of 2014 alone, digital gaming was responsible for over $5 billion in acquisitions and mergers.

In fact, last week, mobile game company SGN, run by former Myspace executive Chris DeWolfe, announced the acquisition of Fat Rascal Games Inc. and Kiwi Inc, two high-profile moves for DeWolfe's company. And this deal comes on the heels of a report in November that Activision Blizzard Inc. (ATVI) purchased the maker of Candy Crush, King Digital (KING), for an enormous sum of $5.9 billion, while earlier in the year, mobile game designer and publisher Cheetah Mobile bought up French company MobPartner.

Amidst all of the mergers and acquisitions, digital gaming continues to expand at a breakneck pace, reaching $80 billion in revenue for 2015 with $104 billion projected by year-end 2018. Globalization can be thanked for a large portion of these figures, as markets such as Russia, which experienced massive growth in its mobile games industry in 2014, and China which harbors over 115 million mobile paying gamers, have become major contributors to the global industry.

With this kind of expansion, and new deals constantly in the works, investors have questioned the next possible company to land at the center of a landscape-altering merger or acquisition. These types of mergers or takeovers are immensely valued on Wall Street, as the unique media given to each one causes investors to own stakes in the parent company. Additionally, in a case like SGN's, the acquisition of several smaller companies can bolster the parent company's portfolio prior to a possible IPO - an event that can serve as a catalyst for the entire mobile gaming sector.

Just breaking into social gaming Pocket Games (PKGM) Oct 8th 2015 Pocket Games announced it has signed an agreement to acquire Viximo, Inc., a social gaming platform, for $3,500,000 in Series B Preferred Stock. The transaction has been unanimously approved by both Boards of Directors and is expected to close in the first quarter of Pocket Games' fiscal 2016.

SPYR, Inc (SPYR) recently breaking into the mobile gaming sector recently launched their third game Rune Guardian is a free-to-play puzzle game in which the player must manipulate a rune through a puzzle board into its goal.

GigaMedia (GIGM) provides online and mobile games, and cloud computing services in Taiwan and internationally. Its portfolio of online games include MahJong, a traditional Chinese title game; non-cash gambling or casino casual games through FunTown-branded platform; and chance-based games, including bingo, lotto, horse racing, Sic-Bo, slots, and various casual games.

One company whose name has come up frequently as a possible target for a large acquisition or merger is Tapinator, Inc (TAPM). With a sizable catalog of games - several of which, like Dice Mage and Combo Quest, have been recognized by iOS awards and top ten lists - Tapinator exhibits the type of fan base (over 100 million users) and leadership team that would appeal to another major player in the industry looking to enter into a major partnership. The company's average daily downloads recently were up nearly 300% in year-over-year figures.

Another intriguing aspect is the experience of Tapinator's CEO and Chairman, Ilya Nikolayev. Mr. Nikolayev co-founded and served as the CEO of Familybuilder, developer of the popular Family Tree application. He was primarily responsible for raising venture capital funding for the business, growing it to profitability by gaining over 45 million users on Facebook. Eventually, the company was successfully sold in a large acquisition to Intelius in 2011.

Now, Nikolayev may be faced with the unique opportunity to repeat that accomplishment with Tapinator, by way of several different channels. In particular, Tapinator has increasingly focused in recent months on social casino gaming, with casino-themed games like Video Poker 2.0 and Dice Mage serving as prime candidates to be bought over by a major player in the casino industry. Given the consolidation trends currently taking place in the mobile gaming industry, as well as the rapid rate of expansion of the industry's social casino sub-genre, Nikolayev has wisely placed Tapinator at the center of two incredibly hot markets.

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SOURCE: Seraphim Strategies LLC