Kids’ game king TabTale nabs US game maker

Israeli kids’ game start-up TabTale is expanding yet again. The company announced this week that it was acquiring Sunstorm Games, based in Las Vegas – making it the Israeli firm’s first US acquisition. It’s TabTale’s third acquisition in the past year, after buying companies in Serbia and China, and is part of what the company called its “global development plan.”

More significantly, Sunstorm, which had 100 games in its portfolio and millions of customers, was one of TabTale’s main competitors in the kids’ game space, said TabTale CEO Sagi Schliesser.

“We followed Sunstorm’s activity for a while and reached the conclusion that acquiring Sunstorm and working alongside its talented team will not only enrich our portfolio, but will also expand our worldwide reach. With some 5 million monthly customers, Sunstorm Games has a proven loyal fan base, similar to that of TabTale.”

The acquisition gives TabTale a foothold in the market where it has most of its customers – and where its main competitor, Disney, has its home base. Repeatedly ranked by industry experts as a Top 10 bestselling games publisher worldwide, TabTale’s games are downloaded millions of times a week – often more than the familiar Disney games.

“We are able to go head to head with Disney, and we often beat them in downloads,” said TabTale creative director Dori Adar. “We have a lot of loyal users, and even though the star power of the Disney characters is very big, we get a lot of repeat customers for our games who download new ones as we release them because of their experience playing our games.”

Most of TabTale’s characters are original, developed by the company for its games, although the company does license some characters, added Adar.

Five years old and now with operations in seven countries, including Serbia, Macedona, Ukraine, and China, TabTale employs 230 workers, most of them at its headquarters in Tel Aviv. The company usually releases at least one game a week, nearly all of them based on original characters and storylines developed in Israel. The company raised $12 million in Series B funding last year, for a total of $13.5 million to date.

The company’s games consistently are at the top of download lists in the App Store and Google Play. Last December, TabTale’s Airheads Jump was selected as one of the App Store’s Best of 2014 Games. In August, the company was rated as one of the Top 10 Games Publisher Worldwide (iOS and Google Play combined) by a top industry site, and since its establishment five years ago, over 600 million TabTale games have been downloaded, said Adar. Most of TabTale’s downloads are based on a freemium model, with the app or game available for free and extra features available for a fee, from which TabTales derives much of the approximately $20 million of its annual revenue. In Outdoor Baby, one of its popular games, for example, users can play for free and buy virtual goods, like tents and flashlights, for real money.

In 2014, TabTale acquired Coco Play Limited, a Hong Kong and China-based developer of educational apps and games for kids, giving TabTale a beachhead in Asia, where it will have access to hundreds of millions of potential new users of its more than 250 games, interactive books, and educational apps. With tens of millions of potential new customers, said Adar, the company is translating its English-language games into Chinese, and vice-versa. “We’ve been localizing some of our games and apps for China, and it has been a challenge, because of the language and the culture.”

On the other hand, Adar adds, many of his Chinese customers are fine with games in English since they give their kids an opportunity to build up valuable language skills. Earlier this year, TabTale also acquired Level Bit, a Serbian computer and mobile game development studio that TabTale announced last week that it had acquired. Level Bit is the developer of w “Genesis Rising,” a title that has sold millions of copies around the world.

While no one can tell the future, TabTale has no plans of selling itself – not that there hasn’t been interest, said Adar – and its latest acquisition further solidifies TabTale’s position and presence in the market, the company said. “It’s a great business, and a lot of fun. Gaming has become a worldwide movement, and we’re proud to be an important part of it.”