GameStop Gets Digital With Kongregate Buy

UPDATED. GameStop (s GME), the world’s largest game retailer with nearly 6,500 physical stores, is acquiring Kongregate, the free online game aggregator. Terms of the deal were not disclosed, except that Kongregate will continue to operate independently under its current leadership in San Francisco (GameStop is based in Grapevine, Texas). The move brings GameStop into the casual and online gaming world with the promise it will market Kongregate to the people who visit GameStop’s stores.

Kongregate, which has 10 million monthly visitors, has succeeded by building a community around its “YouTube for games” reputation wherein players are motivated to socialize and compete against each other. The company has chosen to stay a destination site and not switch to a more Facebook-centric model (a trend, as modeled by Zynga), according to Kongregate CEO Jim Greer in a recent video interview at GigaOM HQ. Greer also talked about the ins and outs of virtual goods, which it provides through revenue-sharing deals with its 8,500 game developers.


Kongregate had raised $9 million in funding from Greylock Partners, Jeff Bezos and Jeff Clavier, among others. For a blast from the past, we also had Greer on The GigaOM Show on Revision3 back in the day (November 2007). Gotta love that peppy theme song.

Update: James Slavet of Greylock, who served on the Kongregate board, spoke to us about the deal, which he called “definitely a positive outcome” for the startup and its investors. He described the acquisition as Goliath joining forces with David to tackle the game industry as it moves to the browser, calling GameStop “the Walmart or BestBuy of gaming,” while Kongregate is a scrappy startup in Silicon Valley built by a developer who’s been coding games all his life.

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