Rock You acquires Playdemic

Last week, Rock You acquired Playdemic, a social gaming company based in England with 16 employees. What makes this acquisition interesting is that Playdemic has only created one game with about 500,000 active users. Gourmet Ranch is a hybrid game that combines cooking and farming, much like FarmVille. The strategy behind the acquisition appears to be to add active gamers to the stable of applications that Rock You launches.
Most Rock You apps are not games, however, which brings the overall strategy into question. Social gaming has proven to be very profitable at firms like Zynga and Playfish. Apps such as Super Wall and MyGifts for Facebook have hundreds of thousands of users, but little to no revenue. Rock You might be better served by developing its own games from scratch. While the purchase price was not disclosed, it makes little sense to step into the overbuilt farming genre at this point, unless the company was able to get a very favorable price (terms of the acquisition were not disclosed), or unless there are multiple games with huge potential that Playdemic is prepared to launch. Barring these scenarios, it doesn’t make much sense to acquire a tiny company with one minor hit.