Microsoft could buy its way into social games in 2011, analysts say

Microsoft Game Studios
The year 2011might involve even more acquisitions in social gaming from more companies than just Zynga, with potential buyers like Microsoft and media giant Viacom expected by analysts to be considering serious purchases, Reuters said. Because advertising isn't exactly working out this decade, big media and tech companies will look to virtual goods to stay afloat, according to analysts' predictions.

"The truth is everybody is talking to everybody, every potential buyer is probably talking to just about every social game company out there," said principal with Norwest Venture Partners Tim Chang, whose firm invested in Playdom.

Apparently Microsoft could be the next big customer, looking to enhance its Xbox Live platform, industry executives said. With Zynga's FarmVille coming to Microsoft's Windows Phone 7, they just might be right. However, Zynga is pretty much off the table at this point with an estimated worth of over $5 billion, but that doesn't mean smaller companies couldn't fill that void.

Find out who could be gobbled up next after the break.
Money Handling
"With Playfish and Playdom gone, Zynga being unbuyable, we're on the downside of that slope," said Don Rainey, a partner at Grotech Ventures. "We're through the big moves and into the small moves."

What about 'small move' companies like CrowdStar or Kabam? While CrowdStar chairman Peter Relman reportedly doesn't feel the pressure to sell, Microsoft could probably offer him something enticing. Who knows, Microsoft could be looking to promote the next phase of its Halo franchise through social gaming. All the cool kids are doing it. A Microsoft-owned CrowdStar could become the Facebook brand manager for Microsoft Games Studio much like Playfish is for Electronic Arts.

While consolidation through buyouts is certainly good for business, this could hurt the creative potential of social games studios to make gripping games with fresh ideas. There's nothing like the pressure to create a brand seller to stunt innovation. Hey, at least according to analysts, social games could be worth over $2 billion come next year.

[Image Credit: Getty]

What do you think 2011 will hold for social games companies like CrowdStar or Kabam? What could these potential buyouts mean for the games we play? Sound off in the comments. Add Comment.
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