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August 20, 2014

FunPlus to sell a gaming unit to China’s Zhongji

FunPlus’ Family Farm game is played by 4 million users per day.

By CBR Staff Writer

The maker of mobile social games Family Farm and Happy Acres is selling its gaming division DianDian Interactive to Chinese construction firm Zhongji for $960m.

Based in China, the social gaming firm has mainly targeted western markets for its games including Family Farm, which reportedly supports 16 languages and is played by four million users per day.

FunPlus CEO and co-founder Andy Zhong said: "The mobile market in Asia, and especially in China, will be a massive driver of growth for our industry.

"We believe it will grow exponentially, and that Chinese public market investors will highly value innovative gaming and entertainment companies with global vision."

The deal would expand Zhongji’s present portfolio with a lucrative and growing gaming and entertainment business, while FunPlus would in return receive widened access to the Chinese market, Zhongji’s public market management expertise, and substantial capital toinvest in global market expansion.

Commenting on the deal, Gartner’s analyst Brian Blau noted that Zhongji is purchasing a firm the reportedly generates about $6m per month, with ‘much of that is profit’, while the bulky premium price is about 13 times more than the annual revenue.

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Blau told the San Francisco Chronicle:"To be fair, the deal is for more than one farm game, but I’m not sure that makes it any easier to understand.

"What they got was a substantial game business, and one that if managed correctly can do even better, but it’s a really big risk.

"Their current and future games must perform well before Zhongji will see a return on that big investment."

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