Continuing its dismal track record in M&A and new business initiatives (remember DRM'ed music CDs?), Macrovision (NASDAQ: MVSN) today announced that they're selling their TryMedia casual games group so that they can focus on their pending purchase of Gemstar - shareholders must not be quite as pleased since the stock has dropped almost 50% since the Gemstar deal was announced.
Macrovision purchased Trymedia, a rapidly growing casual game distribution and DRM company, in July, 2005 for $34M - here is the CEO's press release quote - "This acquisition, along with the formation of our new business unit, underscores Macrovision's strategic focus to efficiently enable our customers to distribute their games both on and offline," stated Fred Amoroso, president and CEO of Macrovision. "Consumers today want to be able to get their game content when they want it, where they want it and that requires a distribution system that enables that flexibility securely, while also protecting the content from massive unauthorized usage."
After watching the casual game business massively increase in the past 2 years, Macrovision has now chosen to exit that business, for a price which I understand is slightly larger than what is in my son's piggy bank at home. TryMedia has lost ground in both business categories under Macrovision's stewardship, so it will be interesting to see who the acquirer is, and how much they really pay, but I believe that there is a good business and team there if run properly under new owners.
UPDATE - Real Networks (NASDAQ: RNWK) has been revealed as the purchaser, having agreed to pay $4M for the TryMedia assets. From what I understand, Real came in at the last minute, right before Macrovision was going to shut it down. It's an astute, if incremental, purchase by Real. They get instant access to a larger set of distribution relationships for RealGames, and they pay only a small amount for it since they will presumably shut the technology down and transfer it to the RealArcade platform. I even ran into a hedge fund manager this week who insisted that RNWK might even consider spinning out RealGames since it would be worth far more as an independent entity than it is stuck inside Real, but I don't take that concept too seriously, even if it's a logical step.
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