Start-up behind 'Family Guy' and Marvel superhero mobile games is bought by SGN

Gaming firm TinyCo is based in San Francisco, but its business is rooted in Hollywood. 

Thanks to its Marvel superhero and “Family Guy” mobile games, the start-up has become a leader in its niche. And also an acquisition target. 

TinyCo Inc. got scooped up by Culver City gamemaker SGN Games Inc., the companies announced Tuesday. Terms were not disclosed, but TinyCo's financial situation suggests a value exceeding $100 million.

Mergers and acquisitions in the gaming industry have picked up in recent months as companies seek greater market share in expanding but highly competitive arenas, including mobile gaming. The deal leaves SGN with a greater variety of games, an important strategy in a business where consumers may quickly ditch one popular title for another.

SGN created the characters for its top two games, “Cookie Jam” and “Panda Pop,” and plans to potentially make TV shows or other forms of entertainment involving them.

TinyCo balances that out as it pursues the reverse strategy, licensing characters from major media companies to attract gamers. Companies such as TinyCo and Kabam have sought out Hollywood's help – and vice versa – to turn diehard fans of characters and celebrities into customers. It’s a financial success in many cases.

TinyCo, founded in 2009 and originally focused on games for Facebook, projects $100 million in revenue and some profits over the next 12 months, SGN Chief Executive Chris DeWolfe said.

“Other games have done it successfully, but they are a pioneer in the builder category, and they have an engine that allows them to do it with many more," DeWolfe said.

Sales of virtual items have slid in the “Family Guy The Quest For Stuff” game, which enables players to build and protect their own virtual town. But DeWolfe said investment from SGN should give it new legs.

The months-old “Marvel Avengers Academy” title received a boost in downloads after the recent “Captain America: Civil War" film and continues to remain among the highest revenue generators among mobile games. It features young adult versions of the characters Iron Man, Thor, Black Widow and others.

TinyCo has deals to create “several” more games based on TV shows or movies, DeWolfe said.

TinyCo co-founder Suleman Ali sold his former gaming company, Esgut, to SGN too. But that iteration of SGN faltered soon after the 2008 transaction, going on to sell its trademarks to DeWolfe’s gaming venture a few years ago.

DeWolfe said he and Ali had been friends for “quite a while” though. Deal talks picked up about five months ago. TinyCo had raised about $40 million from investors, including Andreessen Horowitz and Pinnacle Ventures.

“It didn’t necessarily come cheap but we love the relationship,” said DeWolfe, who’s been able to pull from a $130-million investment last year to fund acquisitions. “Anytime you can have larger market share in a growing market, it’s a great place to be.” 

paresh.dave@latimes.com

Twitter: @peard33

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