Posted by: mrrx | December 22, 2007

The most amazing story in MMO history. Except it’s false.

There’s a rumored acquisition starting of Sony Online Entertainment by, of all things, an INDIAN company.  Talk about your big news ! Problem is, it’s probably false – Smed claims the whole thing is wrong.

First, selected items from the rumored story –

NEW DELHI: Zapak Digital entertainment, the online gaming company promoted by Anil Ambani-led ADAG group, is all set to buy out Sony Online Entertainment (SOE) for around $300 million (Rs 1,200 crore).

Sony Online Entertainment is the game development and game publishing unit of Sony and posts revenue of around $ 150 million (the company doesn’t reveal the exact details for the division).

No idea if that’s accurate or not. Still, a sale price of twice yearly revenue ? Only makes sense if Sony is losing a ton of money for some reason. Shoot, if they’re for sale on those terms I want a piece of the action.

This acquisition is in line with the future plans of Zapak Digital, which is planning to enter the gaming space in China by early next year. “This makes perfect sense for us, as around 80% of content in the gaming industry is manufactured internationally. Buying out Sony, will not only give us access but also expand our reach in the global market,” said a senior Zapak Official.

The major expenses in the gaming industry is on content and marketing, and Zapak aims to reduce the cost of publishing a game by buying out those studios and relocating them to India. “This will reduce the cost drastically from $30 mn to $10mn, which will give us the advantage to channelise our funds towards marketing and other activities,” the official said.

In the recent past, Sony has aligned with Virgin Comics, a Bangalore-based collaboration of famed, self-help guru Deepak Chopra, filmmaker Shekhar Kapur and Richard Branson of Virgin Group. After the proposed acquisition, Zapak plans to retain control over all the deals, which has been signed by Sony Online.

According to the latest IMRB report, there are about 2.8 million online gamers in India and the online gaming industry is worth Rs 21 crore. Zapak is one of the top players in the Indian gaming space.

A visit to reveals a company that gives out free online games, massively multiplayer in the same way Yahoo games are – chess, checkers, backgammon and the like. As I write I believe it’s 10am Sunday in India, and there are a massive 7 people playing chess, and 5 playing kancha.

I could be wrong, but this doesn’t sound like the kind of group to be buying up Sony.

The numbers in the article seem a little suspect. Would you pay rupees 1200 crore to get leverage and try to grow a market segment currently at rupees 21 crore ? I sure wouldn’t.

It appears that the Smedster has been in contact with Zapak, actually. But they want to partner with them related to MMO’s in India –

Sony Online Entertainment (SOE) has already short-listed probable local partners for a joint venture to set up a studio in Bangalore which will develop game content for the Indian markets.

Zapak, which has played a key role in revolutionising the Indian online gaming segment, is all set to open its own development studio. Rohit Sharma, chief operating officer, Zapak Digital Entertainment, said: “For the 500 games that we have online, 80% of the content is outsourced. We intend to establish a full-service game development studio in India in a joint venture with an international firm.”

Although like SOE, Zapak, too, has not yet finalised a partner yet, but the idea is the same — combining local understanding of the market along with international expertise. This sort of heavy commitment from both the companies sounds like good news for the gaming industry.

Notice that “80% outsourced” thing in there a second time ?

It’s clear to me which story is more believable.



  1. […] has done a great job juggling the various press releases to get at what is probably closest to the actual […]

  2. […] from the community, another press release showed up in the India Times stating that Sony was selling their Sony Online Entertainment division to Zapak Digital Entertainment of India for a paltry $300 […]

  3. Wonderful post
    Zapak has been expanding a lot, lately.
    I was a total addict at Indiagames until Zapak came.
    The range and quality of games available at Zapak is just mindblowing.And to top it all, they now support it with offline events like Gameplexes.
    What I discoverd was that you can even embed their games as widgets in your blog. I tested one.
    Here is the link

    Although I have not yet started utilizing the full potential, I can see this adding a lot of value to gaming bloggers.
    Would like to see your comments about the same on my blog. : D

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