Slow-burners can be winners too

Casual games have come a long way since Microsoft Solitaire was launched. Solitaire, which came free with Microsoft Windows, is widely considered the first successful casual game and was beloved of bored office workers around the globe.

For those of you who have had less time on your hands in recent years, casual games are electronic or computer games targeted at a mass audience. They usually have simple rules and an engaging design, and require no long-term time commitment or special skills to play. New players can begin playing in minutes on their mobile keypads or using a one-button mouse on a laptop.

But, whereas casual games once seemed like an afterthought embedded in the software of Microsoft and its rivals, the thought and effort put in to them these days reflects a changing landscape. Take the release of the latest casual game from I-play, a leading exponent. The game, Sexy Pillowfight, is marketed thus:

Welcome to the league, rookie. You've been selected to join an elite and sexy crew of hot women in the exclusive world of competitive pillow fighting. Do you have what it takes to rise to the top of the league? Choose your fighter, customize her look and get swinging those pillows!

Whether you are impressed or underwhelmed by the sophistication of the offering, there is no doubting the demand for it. According to Library House’s database VenturePedia, London-based I-play, which was founded in 1998, was sold at the end of last week for about $120m, to Oberon Media, a publisher and distributor of casual games. The merged group will become pivotal in the sector. It will own more than 1,000 casual game titles and count more than 350 partners, including Microsoft, Comcast, Sprint, AT&T, Yahoo Games, Electronic Arts and AOL Games.

Oberon has taken a calculated risk. With over 1.7bn mobile phone users, it thinks mobile gaming will be the first truly mass-market form of video-gaming. And the business model is undemanding in terms of the capital required to expand. Casual games typically cost less than $200,000 to produce and production cycles are only six months to a year. There is also no shelf space, packaging, or CD production to pay for. That means, at about $20 a game, any company with large economies of scale will have very high profit margins.

Now, we are not, by any stretch of the imagination, here to extol the virtues of casual gaming or any company in that sector. But this brief examination of the sector does bring an interesting issue into focus. Namely that the gestation period of a business, even in the technology arena, can be longer than a few weeks or months. Although by common consent any hot idea has to be marketed hard and fast or risk being superseded by another, this does not mean that slow-burners cannot be winners too. Like Solitaire, some things require patience and time.

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The Week's Deals

Twenty-one companies gained venture funding this week, nine were of undisclosed value. The deals raised a total of €42.2m, which is €3.5m on average.

Radlive, the Israel-based developer of high-definition telephony technologies and applications, has raised $3.7m (€5.7m) in series A funding from Gemini Israel Funds and Elron Electronics Industries. Each investor gained a stake of about 29 per cent. Radlive says that the quality of the vast majority of today's telephony calls is less than satisfactory and it will use the increasing availability of wider bandwidth to provide high quality voice for telephony calls. The company’s initial product, targeting enterprise customers, is planned to launch in mid-2008.

Alligator Bioscience, the Sweden-based biotechnology company, has raised €5.5m from East Bay Holding, Home Capital, Malmsten Invest and other undisclosed investors. Alligator Bioscience’s technology allows it to develop new, and optimise existing, therapeutic and diagnostic proteins. The company says that the funding will be used to prepare for an IPO in about two years.

Telepartner, the UK-based supplier of mobile data applications for field workers, has raised $7m (€5.2m) from New Venture Partners. The deal includes the acquisition of the mobile asset management division of US-based Telecommunications Systems. The funding will allow the company to offer products to customers across a wider range of mobile working situations.

OptoGaN, the Germany-based developer of high brightness LED wafers and chips, has raised €5m from Finnish Industry Investment, VNT Management and Via Venture Partners. OptoGaN says that its patented technology makes it possible to make very bright LEDs at low cost which will open the market for the use of LEDs in general illumination. The new funding will mainly be used to introduce the company’s chips to the market.

Elsewhere, Gizmoz, the Israel-based social expression and user generated media service, raised $6.3m (€4.7m) from Benchmark Capital and Columbia Capital; First OverSi, the Israel-based peer-to-peer caching and content delivery company, raised an undisclosed amount from Cisco Systems, TempoPark Fund and StageOne Ventures; and Teklatech, the Denmark-based developer of clock-timing technology for computer chips, raised €1.1m from Ulrik Danneskiold-Samsoe and SEED Capital Denmark.

See below for a complete list of deal headlines.

Did we miss anything? If you think we have missed a deal or know of a deal that is about to close then send us your deal news.

The Week's Exits

Last.fm, the UK-based music-focused online social network, has been acquired by CBS Corporation for $280m (€206m) in cash. Founded in 2002, Last.fm provides custom online radio streams and other music-related community features. It currently has more than 15 million active users in more than 200 countries. CBS said that Last.fm will continue to operate as an independent entity, and plans to keep Last.fm's management team including its three co-founders.

I-play, the UK-based developer of casual mobile games, has been acquired by US-based Oberon Games. Financial terms of the transaction were not disclosed, although Israel's Globes Online reported that Oberon will pay $110-120m. Oberon Media expects to continue operations in both companies' existing locations worldwide and maintain the I-play name and brand. David Gosen, currently chief executive of I-play, will lead Oberon Media's mobile games business worldwide.

Microsol, the Ireland-based provider of power monitoring and control systems to the utility industry, has been acquired by India-based Crompton Greaves for €10.5m. Crompton Greaves, which designs and manufacturers electrical equipment for electrical substations, said that the acquisition will increase its strengths in the area of high-end engineering and sub-station automation.

People Moves

Pronota, the Belgium-based predictive biomarker company, has appointed John Berriman as chairman. Mr Berriman is also chairman of Algeta and a member of the board of directors of MicroMet, Ablynx and Oxxon Therapeutics. He has also served on the boards of Solexa (director and co-founder), Chroma Therapeutics (chairman), Epigenomics, Alnylam and XCounter.

ReceptIcon, the Denmark-based biotechnology company, has appointed Professor Anders Vedin as chairman. ReceptIcon is developing receptor antagonists that prevent accumulation of therapeutics in the kidney. Steen Helde Hemmingsen, who had been chairman since 2005, will continue as a board member.

LUX biotechnology, the UK-based developer of light based detection technologies, has appointed Bryan Smith as chief operating officer. Lux Biotechnology develops detection technologies based on fluorescence and luminescence.

Most Accessed Companies

ResponsiveLoad, the UK-based designer of technology to help manage the stability of electricity grids, has attracted a lot of attention this week. ResponsiveLoad has developed a device that harnesses the collective power of large numbers of consuming devices, such as fridges to enhance the stability of electricity grids. The company believes that its technology will also allow the grid to adapt more easily when many renewable energy sources, such as wind, wave and solar generation, are operating.

Sidec Technologies, the Sweden-based developer of technology to aid drug discovery and development, has also received a lot of attention recently. Sidec’s technology provides structural 3D information of individual proteins or protein complexes in solution or in their natural context. The technology is designed to increase the quality of drug discovery and development by providing structural information of proteins in their natural environment. Recent investors in the company include Earlybird Venture Capital, Industrifonden and Investor Growth Capital.

Other companies generating interest recently include Garlik, NaturalMotion, and Gigle Semiconductor.

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