Viber, the messaging app with 600 million+ users acquired last year by Japan’s Rakuten for $900 million, is today making its first acquisition, specifically aimed at building out its new games business. It is paying $9 million for Nextpeer, a social gaming startup based in Israel that offers games developers an SDK to incorporate social gaming features into their apps.
Rakuten says the SDK and related services are staying online and will be expanded and integrated to work with Viber’s platform. All 12 employees of Nextpeer will join Viber, effective immediately.
“We are delighted to welcome the Nextpeer team to the Viber family,” said Michael Shmilov, COO, Viber, in a statement. “In this deal, we looked for a team that shares our passion, drives innovative thinking and brings its expertise in building an open platform for developers.”
This is Viber’s first acquisition. The gaming service was first introduced at the end of 2014 and was expanded globally in February of this year.
Unlike services like the now-defunct OpenFeint — which offered an SDK for developers as well as a platform for consumers to find and interact with different social games — Nextpeer SDK is the full extent of its business today. However, it looks like the company at least used to also publish games in the past, so there is expertise and IP there for Viber to use in the wider gaming platform.
“Nextpeer’s vision is to bring social experiences to mobile players,” said Shai Magzimof, Co-Founder and CEO, Nextpeer. “We are teaming up with Viber to help connect players on mobile and deliver a powerful social platform for developers. We are all very excited to join the Viber team.”
The SDK as it looks today is priced as a freemium service, with a free tier incorporating ads from Nextpeer’s network; a “studio tier” capping MAUs but offering more customization of the UI and no ads for $199/month; and an enterprise tier priced according to bigger size and more usage. Nextpeer claims that games using its technology have been downloaded nearly 196 million times.
More specifically to Nextpeer’s business model, the SDK has over 8,000 registered users, with 2048 Number Puzzle being among some of the more popular games using the service.
It’s not clear why Nextpeer decided to sell, but the company had raised a very modest amount of money — $2.9 million in seed funding back in 2013 — and that might have had something to do with it. More generally, we have been seeing a lot of consolidation in the gaming space, with acquisitions by Gree and Razer yesterday, and so it’s not surprising to see even more.
“The acquisition gives Nextpeer access to bigger strategic partners, as well as the chance to work with Viber’s 600 million registered users worldwide,” Smilov told TechCrunch. “The two companies also have a similar passion, with the goal of connecting players on mobile to deliver a powerful social platform for developers.”
For Viber, adding more features and tech to its gaming business makes sense for a couple of reasons. First, it helps Viber expand the functionality of its gaming platform, and significantly to expand the kinds of services it is offering to developers. That, in turn, gives the company more stickiness with those developers, in hopes of getting them to develop more for Viber’s own gaming portal. More generally, it helps Viber keep level with other gaming services, which are adding many more features to keep users from straying away from their platforms.
Other services from Viber include stickers, photos, videos and doodles, locations sharing and calls.
Second, this is about revenues. If Viber will be making most of its revenues in games from in-app purchases, this develops a second sales stream based around services to developers who may pay to take more premium tiers of Nextpeer’s service.