Whitefish, MT / May 5, 2014 / CrowdGather Inc. (CRWG), a leading owner and operator of online communities and social networks, recently announced the acquisition of Boston-based PLAOR for approximately $5 million in stock. The move marks an ongoing shift by management towards mobile apps, social gaming, and hosted forums rather than its wholly owned and operated forum network.
In this article, we’ll take a look at the company’s move into the social gaming industry, transition away from it’s vertical interest, owned and operated forums, and what these developments might mean for both shareholders and potential investors.
Move into Social Gaming
The social gaming industry is expected to grow at a 16.1% CAGR to reach $17.4 billion by 2019, according to Transparency Market Research, driven by increasing demand for smartphones and tablet PCs. Innovations in the provision of virtual goods helped generate approximately 60% of the revenue in the industry by 2012, followed by advertising revenues from more traditional venues.
PLAOR is an emerging new social gaming publisher led by industry professionals from Microsoft Corporation’s (MSFT) XBOX team, Disney Company’s (DIS) Interactive division, and Sony Corporation’s (SNY) Online Entertainment division. According to a recent press release, the company is generating approximately $1 million in revenue on an annualized basis with over 20,000 average daily users.
Leveraging CrowdGather’s existing users and capital markets access, PLAOR should be able to significantly grow its revenue and user base over the coming years, particularly given the industry expected 16.1% CAGR through 2019. The existing users in particular should provide immediate synergies to boost the number of daily active users within the next couple of quarters.
“Our expectation is that we will emerge from this merger as a stronger and faster growing business,” said CrowdGather Chairman and CEO Sanjay Sabnani in a recent press release. “Our vision is to create an exciting, high growth company that will leverage our traffic, users, and social media reach to provide PLAOR’s titles with immediate access to hundreds of thousands of potential players for their games.”
