David Murphy
We've seen plenty of media and video game-related acquisitions this past year, including Ziff-Davis' sale of popular gaming site 1UP to Hearst Corporation's UGO Entertainment and the closing of the fabled Activision/Vivendi (and, by proxy, Activision/Blizzard) merger. You can now mark your scorecards for the second big gaming media acquisition of 2009, as Gamefly has picked up the gaming journalism site Shacknews.
Judging by forum comments Internet-wide, including those found on Shacknews itself, the purchase came as a bit of a surprise to industry pundits. But it doesn't appear that Gamefly is hurting in the financials--the company just opened two new distribution centers in Austin and Tampa last year, and has plans to open its fifth center in Seattle in the first half of 2009.
According to Shacknews founder Steve Gibson, the purchase wasn't made because Shacknews suffers from any of the financial difficulties that have been plaguing publishing as of late.
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"We are confident Gamefly will protect the legacy and community we've established, while at the same time providing much needed resources to expand into new and exciting areas that would not otherwise be possible," said Gibson in a news release on Shacknews.
While Gamefly co-founder Sean Spector maintains that Shacknews will keep the same voice and feel as it's had pre-acquisition, we've all heard this news before. So what's Gamefly planning? It would make more sense for the rental service to jump into digital territory by launching a direct download service of its own, analogous to Valve's Steam platform or Stardock's Impulse. Or better yet, offer console-based integration of its rental services a la Microsoft's partnership with Netflix for the Xbox 360 console. Though I honestly doubt the latter would happen, as it would directly compete against... well, the entire platform.
Since Shacknews does incorporate a large amount of PC coverage into its gaming news, perhaps this is a sign that Gamefly is ready to look beyond the living room and begin offering some kind of rental or purchasing service for PC titles. That's bitter speculation at this point, but I can't think of any other reason--aside from increasing brand awareness--as to why Gamefly would want to purchase a media hub and its accompanying video hub (Shackvideo) and file-archive (Fileshack). Something big is afoot, and hopefully we'll see the inklings of it before too long.
Chris Morris, who writes the Game On column for Forbes.com, has conducted an interview with Gamefly regarding the qcquisition news. Not much gleamed from that one in regards to future busines plans, as Gamefly is playing its hand with what it intends to do about Shacknews. One interesting glimmer: the move doubles the traffic for Gamefly's chief property, provided the company is able to successfully combine all the 2.5-to-3 million users that flock to each individual site every month.