Why We’re Buying TinyCo, A Studio That Turns Entertainment Brands Into Hit Mobile Games

Friends,

I’ve got great news.

Jam City is buying TinyCo, a San Francisco studio that’s built a thriving business out of converting Hollywood brands into popular mobile games. They’ve already done it with Family Guy: The Quest for Stuff and Marvel Avengers Academy. More importantly, with other equally iconic titles in hand now, they’re going to do it again soon.

The deal closed today, and we’re pumped about it.

TinyCo’s cofounder and CEO, Suli Ali, and its 125 employees will now be joining Jam City’s kick-ass 275 designers, graphic artists, developers and marketing ninjas. We’re thrilled to begin working together as part of one team.

Last July, we received a $130 million investment from South Korea-based Netmarble Games, and we promised that as the mobile gaming industry consolidated we weren’t going to stand by and watch.

We think we’re making good on that pledge. TinyCo just became our third acquisition since December.

The mobile gaming business is a good place to be these days. This year, revenues are expected to surpass those from the PC and console gaming industries for the first time ever. What’s more, revenues from mobile games are forecast to grow at 10 times the rate of PC and console games this year, according to an April report from Newzoo.

All along, we’ve been building toward becoming a giant in this new, fast-growing space, and we’ve made acquisitions that complement that ambition. TinyCo is a key part of that strategy for obvious and not-so-obvious reasons. Here are the obvious ones:

• TinyCo is a great company with serious growth. Its two signature games have been downloaded more than 100 million times. And we expect it to earn more than $100 million this year.
• It helps us become a leader in a different genre of games. While we’re a global leader in puzzle games–think match-three titles like Cookie Jam and Genies and Gems or bubble shooters like Panda Pop–TinyCo is a leader in simulation or builder games.
• It helps us diversify our business plan. Jam City creates and owns its intellectual property. TinyCo has taken a different tack by licensing existing brands. There are a lot of mobile games out there, but ones with name ID have a leg-up on the competition, not to mention lower development and marketing costs.

The thing is, I think there’s a less straightforward yet perhaps more important motivation for this acquisition–one that gives insight into my vision for this company and the future of this industry.

Buying TinyCo advances our goal to not only grow but also becoming a mobile gaming entertainment franchise.

Consider its business model. TinyCo converts globally recognizable Hollywood brands into mobile games.

Suli and TinyCo foresaw the importance of mobile before many others in this business. And in a very clear way, the company has been at the forefront of navigating one of the most important trends affecting this industry–that is, gaming and entertainment are colliding at an unprecedented rate.

Let me explain.

The boundaries that once defined the gaming industry and traditional entertainment franchises are growing increasingly porous by the day. By my count, more movies based on games will be in theaters this year than ever before.

What’s more, they’re doing well.

Two movies based on games–Angry Birds The Movie and Warcraft–are currently ranked 10th and 11th at the worldwide box office, both taking in more than $325 million so far. There are at least two more on the way to theaters this year. In 2017, expect even more.

At the same time, the opposite trend is also true. That is, more movies, TV shows and celebrities are providing content for games, particularly mobile ones. In addition to TinyCo’s Family Guy and Avengers games, the Simpsons and Jurassic World franchises have produced top grossing games. And that’s not even getting into the increasing cross-pollination between Hollywood stardom and gaming.

These days, movie studios are getting into the game-making business, and gaming studios are getting into the movie-making business.

For lack of a better word, I call this intersection or collision between these two decreasingly distinct industries Gamertainment.

It’s a trend we like a lot.

From the beginning, I’ve worked with a team deeply rooted in tech and, also, media and entertainment. Jam City’s CTO, Aber Whitcomb, was also the co-founder and CTO of MySpace; and Jam City’s President and COO, Josh Yguado, was an executive at Fox Networks after working at Univision and MTV.

To be sure, we’ve played our role in this Gamertainment trend, launching our first game based on a movie–the Book of Life: Sugar Smash–in 2014. And last year, we used an actor–Dr. Ken–in national ad campaigns for one of our games, Cookie Jam.

TinyCo fits well into this evolving world where entertainment franchises are becoming lucrative games and games are becoming lucrative gaming franchises.

In the most recent year, we saw our fastest rate of revenue growth ever. We’ve grown more than 1000 percent since 2013. We expect to earn more than half a billion dollars within the year, and we think we can even do better in the near future. Embracing a company that gets this trend will help us do it.

Now, it’s time to start making awesome new games.

Best,

Chris