NEW YORK (AP) - GameStop Corp., the world’s largest video game retailer, said Tuesday it will buy social gaming website Kongregate for an undisclosed sum in its latest step to expand its business beyond brick-and-mortar stores.
Kongregate has 10 million monthly players who use the site to play games and interact with one another. It makes money through advertising and microtransactions _ charging small amounts of money for virtual items and extra content in games.
Kongregate will operate as a unit of GameStop and maintain its offices in San Francisco, said Grapevine, Texas-based GameStop. The acquisition is expected to close around Aug. 1. Kongregate’s co-founders, Jim and Emily Greer, will continue to lead the company.
The addition of Kongregate “is intended to hasten the transformation of GameStop’s website from a purely e-commerce site to a gaming platform,” said Wedbush Morgan analyst Michael Pachter in a note to investors. The analyst estimates that GameStop paid between $12 million and $40 million for the site.
“At such a price, it is likely that the transaction is immaterial to the company’s results, and that any benefits are longer-term and strategic,” Pachter said. He rates GameStop shares at “Outperform.”
Its shares fell 51 cents, or 2.4 percent, to $20.38 in midday trading.
By Rand Paul
Obama acts as though we no longer have a Constitution
Independent voices from the TWT Communities
Television commentary, reviews, news and nonstop DVR catch-up.
Libertarian thought beyond politics, unrestrained by convention.
Empowering mind/body/spirit and health dialogue along with cutting-edge, conscious social, political, and world commentary with Adam Omkara. Join the Evolution!
Viewing and reviewing the Los Angeles experimental and classic punk scene with a nod to Rodney's English Disco
Benghazi: The anatomy of a scandal
Vietnam Memorial adds four names
Cinco de Mayo on the Mall
NRA kicks off annual convention
California wildfires wreak havoc