Social game valuations are "crazy," says Bigpoint CEO
Online publisher targets "struggling" console developers for acquisition while social market is overpriced
While social game companies are over-valued, online publisher Bigpoint is eyeing traditional console makers for acquisition as they represent better value and are struggling in their own market.
Speaking to GamesIndustry.biz today, CEO Heiko Hubertz said that deals like Disney's $763 million buyout of Playdom are "crazy" and he doesn't expect valuations to drop to realistic levels for at least another year.
"There are many companies that have paid crazy valuations, just look at the Disney and Playdom acquisition, that was a crazy valuation from my point of view," said Hubertz.
"We're also in the same segment and if you want to grow at the same speed as your competitors you cannot only grow organically, you have to buy other companies.
"In 12 months, maybe 18 months the prices will be more realistic and then we can look at buying more companies. But that doesn't mean we don't want to acquire now. We're also acquiring companies with a realistic valuation, and there are still companies out there, we're talking to many of them."
The company publishes browser games such as Dark Orbit, Poisonville and War of Titans, and has recently snapped up Drakensang developer Radon Labs. It is also tying up significant deals with Universal and Playboy as it expands with brands and franchises.
Instead of looking at social, online and mobile studios, Hubertz said that Bigpoint hopes to cherry-pick console developers grateful of the lifeline, and put them to work in the new sector.
"In the traditional games industry, in the boxed industry, there are developers who are really struggling and they are not asking for high valuation, they are just asking for survival.
"We're looking exactly for these kind of developers because when it comes to high quality 3D games they have the experience. We can just give them another engine, they don't need to use the Xbox or PlayStation technology, they can use our web technology. They can still develop the same quality of game it's just for a browser."
However, Bigpoint has no desire to enter the console space, said Hubertz, as it's too enclosed and the company wants to work across multiple platforms.
The full interview with Heiko Hubertz, can be read here.