The Rupert Murdoch-owned media giant News Corporation, recently in the news for its purchase of Internet community site MySpace, has announced that it has signed a definitive agreement to acquire video game website firm IGN Entertainment for approximately $650 million in cash.
According to an official statement, IGN and its network of sites will become part of News Corporation's Fox Interactive Media unit. IGN runs a number of high profile consumer video game and entertainment websites, including IGN.com (home to both game platform-specific content and film, music and sports subsites), GameSpy (allegedly focused on PC content), and the popular demo, mod and patch download website FilePlanet.
GameSpy also provides matchmaking and networking middleware for a number of popular PC and console titles from companies including Midway and Microsoft, and its networking technology is enabling Nintendo's DS WiFi service. IGN also recently launched an in-game advertising product, and also offers a voice SDK for in-game play.
IGN Entertainment also owns digital game download service Direct2Drive, other game sites including TeamXbox, 3D Gamers, GameStats.com and a number of owned and affiliated web sites within its Planet and Vault networks, plus non-game sites including film website Rotten Tomatoes and AskMen.com.
IGN filed for an IPO in early July, revealing that "we have experienced losses every year, including a net loss attributable to holders of common stock of $18.9 million in 2004 and $3.4 million in the three months ended March 31, 2005. As of March 31, 2005, we had an accumulated deficit of $23.3 million."
However, with this news, the IPO is now off, and these losses are likely to be relatively unimportant to News Corp compared to the massive amount of users (around 28 million unique viewers every month) and apparent potential for IGN's conglomeration of sites. The transaction is expected to close in the fourth quarter of calendar 2005.
News Corp commented that: "The combined sites will also provide a powerful cross-promotional opportunity for Fox's television and film content and enable the company to more efficiently introduce new products and services using its enhanced web presence", and Mark Jung, IGN Entertainment's Chief Executive Officer, also made a statement indicating: "We believe that Fox Interactive Media is an ideal fit with IGN Entertainment. With this combination, our users will enjoy access to a broad array of content and services covering video games, music, movies, sports and news, and our advertisers will benefit from enormous reach into a highly sought-after demographic. We are thrilled with this acquisition and can't wait to get started."
