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Hasbro Takes A 70% Stake In Mobile Game Maker Backflip Studios For $112M

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Toy maker Hasbro just paid $112 million in cash to take a 70 percent stake in Boulder, Colorado’s Backflip Studios, the mobile game maker behind Dragonvale, NinJump and Paper Toss.

The company was started back in 2009 and never took any outside funding. Their initial games were super-simple like Paper Toss, where players flip a wad of paper into a trash can. But they later got into tower defense games and then eventually into casual simulation games with Dragonvale, where players take care of and raise pet dragons.

They’ve seen about 300 million downloads so far and Dragonvale has consistently ranked in the top 20 highest-grossing games on iOS in the U.S. even though it was first released nearly two years ago. But Backflip may also have been spending quite a bit on marketing, reducing its profit margins as Hasbro said in a statement that the deal will be “neutral to slightly accretive” to its financial earnings this year.

With the deal, Backflip will continue making their own games, and then they’ll also publish games using Hasbro’s brands, which include Monopoly, Transformers, My Little Pony and Magic: The Gathering. Backflip has already done work with outside IP (intellectual property) before when they released Army of Darkness Defense.

I had heard for years that Backflip had explored various acquisition and funding opportunities over the years, but one didn’t come to fruition until this year. As I’ve written before, there’s still somewhat of a disconnect between what buyers are will to pay and what independent or venture-backed gaming companies are willing to sell for in this market.

The deal values company at $160 million, which is another bellwether for the valuations in the industry. One of the top, top-grossing iOS gaming companies in the entire world, Supercell, was valued at $770 million in its last funding round after they made $179 million alone in the first quarter. King is also said to be considering an IPO.

The last few big deals in this space in Western markets were about a year ago with Funzio being sold to GREE for $210 million and OMGPOP being sold to Zynga for $180 million plus an earnout.

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