VIACOM BUYS XFIRE FOR $102M --MYSPACE 4 GAMERS?
For months I've been following XFire (www.xfire.com) and I had a chance to talk to co-founder Mike Cassidy when I was writing my Branding Virtual Worlds story for imediaconnection.com. Although not strictly a 'virtual world" Xfire is certainly a hot community with more than 3 million members since it started in 2004 and an amazing 300,000 new members every month according to the firm's reports. The model is based on advertising and private branding (including branded skins) and it is a fascinating one. Here's an excerpt from the latest Reuters report on this purchase:
NEW YORK
(Reuters) - Viacom Inc. (VIAb.N) (VIA.N) on Monday said it will buy Xfire, an online games technology company, for $102 million in a bid to dominate the youth market on the Internet as it has on television.Viacom, owner of MTV Networks, Nickelodeon and the Paramountmovie studios, said Xfire has 4 million registered members who use its instant messaging and social networking technologies to accompany their online games.
"It's a wonderful component of our overall digital strategy, particularly on the gaming front," Viacom Chief Executive Tom Freston told Reuters. "Our key audiences are and probably will remain kids, teens, young adults -- we want to be anywhere
XFIRE's RESPONSE TO THE PURCHASE:
Advertisers LOVE Xfire -- here's one story that shows that: Xfire Links Advertisers With World's Top Gamers - Jack Myers Media Business Report
(March, 2006) "What happens when the two hottest trends in online media converge? For one, audience growth is exponential....At least that's been the experience of online gaming site Xfire, which seems to have caught fire by integrating community features such as instant messaging, buddy lists, and social networking with its unique gaming applications."
On the XFIRE home page a link to a note form the XFire Team to the users/members says: "What does the acquisition mean to you? It means that Xfire is now backed by one of the world's leading creators of programming and content across all media. It means that Xfire will continue to grow and enhance your gaming experience. Xfire was created by gamers, for gamers. We will always remain committed to improving gaming with your friends. MTV Networks shares this vision with us, and they will help us to continue building Xfire into a larger and more exciting community, one passionate gamer at a time."
THE REAL INSIDE SCOOP FROM XFIRE:
Later on that same page, Chris Kirmse, VP Engineering Xfire explains:" that's the official message. I’d like to share a few additional thoughts with you.We started Xfire about 2 1/2 years ago, based on the desire to play games with friends and the idea that we could detect some game and network information using cool programming tricks. We convinced the founders of Ultimate Arena to let us build Xfire, and since then we've built a fantastic team full of many people who have all contributed to our success.We never had money or desire to advertise Xfire. We figured that if we build a good enough program then everyone would want to share it with their friends. Four million registrations later, I think we've been proven correct.
Obviously, we're all very excited about being acquired by MTV Networks. It validates the success that we've already had. It also validates the methods by which we've had that success--building a great product, listening to our users, and continually improving the product based on feedback. They are very impressed by what we've accomplished so far, and they want us to continue to build our wonderful community.
So... after all that we've been through, I think we've proven that Xfire cannot be stopped. Thanks so much for your support so far, and please continue to let us know what you want and expect out of us. We will deliver.Game on!"
RESPONSE BY XFIRE FORUM POSTS:
Quick survey of the responses so these comments including: Good News For You, I Just Hope X-fire Stays The Same And All Our Stuff Wont Get Wiped
Now heres the question everyone wants to know Why $102 Million and not $100 or $103?
cool cos im a little confuzzled, im just hoping nothing about the current x-fire will be lost like game times skins forums etc,
Exellent news. I hope XFire stays the same.
i HOPE IT DOESNT TURN INTO PAY TO PLAY
Exactly what are the intentions of MTV Networks? Why do they feel Xfire is a profitable acquisition? Surely something will have to change for them to make a lot of money from it considering how much they bought you for. |
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AND THE RESPONSE FROM THE SITE ADMINISTRATOR TO THAT QUESTION WAS/IS:
MTV's gaming plans involve building the best editorial and community destinations around. Xfire has already built a big part of that community, and MTV's goals are basically for us to keep doing what we're doing, keep building more and more features to provide the best gaming experience for more and more users. MTV can make us far more profitable simply by bringing our ad sales team and their together, as well as doing cross promotions with their existing online and offline properties. We can accelerate our current growth even by just doing what we've always done, with the help of MTV to get the word about Xfire out to the world. We also know gaming - and that's something that's a big value to MTV as well. I think you'll see Xfire having as much influence over improving MTV's gaming offerings as you'll see MTV influencing what we're able to accomplish. |
--- The Xfire Team
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