Last week, Seattle-based Mobliss laid off about half of its 20 employees, following a wave of high-profile losses, mocoNews has learned from multiple sources. In the last couple of months, the company lost such hit titles as The Price is Right, Family Feud and Deal or No Deal. Today, Colin Prior, CEO of Reaxion, another Seattle-based game developer, confirmed to us that his company is in discussions to merge with Mobliss, which is owned by Japanese-based Index Group. Mobliss did not return calls seeking comment.
The news that Mobliss may be close to shutting its doors, or merging with Reaxion, should come as no surprise as many small mobile game developers are finding that the mobile games business model isn’t working. Licenses for big-brand names are getting pricier, and the costs of distributing the games are getting higher. In addition to carriers taking a chunk of the revenues, aggregators are also taking a piece of the pie because they are the ones who have a direct partnership with carriers. Prior: “The challenge that we have is that the business model for mobile games doesn’t work. The reality is that there’s too many people in the food chain—the carrier takes half the money, and then you go through aggregators, and then publisher gets what’s left.”
Because of these industry trends, Prior said Reaxion, which keeps costs low by developing games in its Russian studio, will be looking for other potential opportunities: “We are talking to a number of companies about strategic mergers.”
This week, Mobliss launched an advertising-based mobile game with Burger King, but generally the company has been plagued by numerous problems over the last couple of years, including losing its CEO Jim Merrick, previously from Nintendo, after six months, and awhile ago, it decided to focus on mobile games after it stopped powering American Idol‘s text message voting system and sold its messaging assets to NewMotion Inc.
