Market Overview

Seismic Games Scores $2 Million to Produce "Next-Generation" Social Games

The free-to-play game developer has acquired $2 million in Series A funding.

The LA-based company, which promises to create “high-quality, next-generation social games franchises,” received the new funds from DFJ Frontier (a DFJ Network partner fund) and Tom Matlack, which the company said is a “notable media entrepreneur, author and venture capitalist Tom Matlack.”

Seismic Games told Benzinga that more than a dozen individual investors – each with ties to the entertainment industries (Hollywood included) – are on board.

According to the official announcement: “With over 50 years of combined executive experience launching globally successful games franchises, the studio looks to bring unique and immersive gameplay opportunities to the social games market with its first title set to launch in the first quarter of 2012. The games will be character-focused and highly customized, igniting a new wave of players looking for more sophisticated narrative and deeper engagement from their experiences online. User-generated and real-time content will also play a central role in the gameplay, as will branded and professional entertainment partnerships which connect online and offline opportunities to audiences enjoying the game.”

“2012 is an incredibly exciting and important time for the games industry,” Seismic Games' CEO and co-founder Greg Borrud said in a company release. “Zynga, along with a handful of other developers, have perfected the analytics-based approach to game design. Seismic is focused on bringing the next wave of social games to consumers who are getting tired of ‘me too' products. In blending the best of the analytics-based game model with the quality of entertainment in traditional video games, we're developing an entirely new social games experience with a goal of taking this market to the next level.”

Borrud, a 17-year game industry veteran, is primarily known as one of the founders of Pandemic Studios, which was sold to Electronic Arts (NASDAQ: EA) in 2007 for more than $800 million. In a typical game industry move, EA closed the studio two years after the acquisition. But as an independent studio, Pandemic thrived, hence the hefty buyout.

Eric Gewirtz, who is credited as the director of the Star Wars: Battlefront video games, will serve as one of Seismic Games' chief creative officers. Chris Miller, whose history includes a VP gig at Vivendi Universal and an executive producer credit on the video games F.E.A.R. and No One Lives Forever, will act as the Seismic Games' president.

“Seismic Games has the vision, knowledge and experienced team required to execute best-in-class social games that resonate with an active and growing online user base,” Scott Lenet, co-founder and managing director of DFJ Frontier, said in a company release. “The launch of its first game will shake up the status quo of the social gaming market and reveal an incredibly powerful engine for collaboration with branded entertainment properties.”


ACTION ITEMS:

Bullish:

Do you think the future of gaming rests within the social realm? If so, consider:

  • Zynga (NASDAQ: ZNGA). The company may be trading below its starting price, but it hasn't dropped off nearly as fast as people anticipated.
  • Glu Mobile (NASDAQ: GLUU), which focuses more on mobile than social, but is still a potential powerhouse in the social gaming realm.
  • Majesco (NASDAQ: COOL), which focuses more on game consoles and handhelds than social media. However, the games Majesco develops are very much the style of casual/simplistic games found on Facebook. Majesco could easily carry over some of its titles to the social realm.
Bearish:

Traders who want a more robust (and more stable) gaming investment might want to consider:

  • Electronic Arts, which appears to have learned from its mistakes and has made progress over the last 12 months.
  • Activision (NASDAQ: ATVI), which many analysts believe will have a stellar 2012.
  • Take-Two (NASDAQ: TTWO), which will release a new Grand Theft Auto – one of the world's biggest video game franchises – later this year.
Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Follow me @LouisBedigian

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