Media baron Viacom Inc. (VIA.B) has entered into a highly lucrative online social gaming business. Recently Viacom’s MTV Network acquired the privately-held Social Express Inc, a social gaming development company. Social Express will be integrated into Viacom’s Nickelodeon Digital segment.Viacom will create online social games for shows and characters of Nickelodeon and other popular MTV Network brands, based on the game development platform of Social Express. MTV Network already has seven online gaming sites that were accessed by over 22 million visitors in last May.
Throughout the world, social gaming has become the key driver of fabulous growth of social networking businesses. Various industry sources estimated the market size of social gaming to reach $5 billion by 2012. It gives scope to media companies to generate additional revenue through online advertising and selling virtual goods within the games. As a result, competition is picking up in this segment. Last week, Walt Disney Co. (DIS: 33.75 +0.41 +1.23%) acquired social game developer Tapulous.
One of the key reasons for the growth of social gaming is the remarkable market traction of 3G smartphones. Smartphones are expected to become the next-generation choice, taking over the market share from basic mobile handsets. Smartphones are generally characterized by very powerful operating systems capable of supporting varieties of services and applications especially, social networking applications.
Viacom benefits from a well-balanced asset mix with entertainment content at its core. The company enhanced its brands worldwide through the creation and acquisition of hit programming, new channels, successful motion pictures and entertainment programs, including video game offerings. An improving economic outlook, together with Viacom’s disciplined management team continue to make us optimistic about the company’s future growth prospects.
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