Market Watch

Disney Buys iPhone Developer

July 12, 2010

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Disney launched its fight back in the iPhone games market with the acquisition of leading developer Tapulous. Once a leader in mobile games, Disney had previously pursued a cautious iPhone games strategy.  Disney will incorporate Tapulous into its Disney Internet Media Group (DIMG). It has renewed its mobile focus to regain market share from competitors EA Mobile and Gameloft.

In December 2009, Tapulous reported that it is profitable and claimed it was generating revenues of $1m per month.  Unlike many of its competitors, Tapulous generates revenues from a variety of business models. It receives significant income from in-game add-on microtransactions and advertising, in addition to paid downloads.

Disney's early success in mobile games was built through a combination of internal development and its acquisition of rival developers. It followed the 2005 acquisition of German publisher Living Mobile with its 2007 purchase of Chinese developer Enorbus.

The deal gives Disney access to Tapulous's valuable licensing deals with major record labels Warner and Universal, as well as adding the developer's experienced staff and lucrative titles.

The purchase of Tapulous comes at time of renewed consolidation in the mobile games industry. In recent months, publishers including Ngmoco and Playdom have also been on the acquisitions trail.

Disney has fallen behind leading players EA Mobile and Gameloft in the operator market and a host of new entrants now compete in smartphone games. Disney will hope the acquisition of Tapulous propels it back to the top of the mobile games market.

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