Scoop: Meta invested in social gaming company Playco
Facebook parent company Meta invested $40 million earlier this year in Japanese mobile gaming company Playco, Axios has learned.
Why it matters: Facebook's user base shrunk (a tiny bit) for the first time ever last quarter, but Meta's apps remain some of the largest social networks on the internet. That's meaningful to a company like Playco, which wants to be on as many popular platforms as possible.
- The deal also reunited two old friends — Facebook and Justin Waldron, co-founder of Playco and Zynga. The latter company's FarmVille game rose to mega popularity as one of the first to be built within the social network. (Meta confirmed for Axios that it invested, while Playco declined to comment.)
The big picture: Playco, founded in 2020 by Waldron, Game Closure co-founder Michael Carter, and game producers Takeshi Otsuka and Teddy Cross, bills itself as an "instant gaming" company.
- In September of that year, it raised a $100 million Series A round at a valuation just north of $1 billion co-led by Sequoia Capital and Josh Buckley. Nine months later it released its first pair of games, built for video chat app Zoom. One is based on Ellen Degeneres' Heads Up! game, and the other is a question-and-answer icebreaker called Ask Away.
- "It’s designed to play quickly while waiting for others to join a work meeting, as an icebreaker with fresh faces, and even to deepen relationships with lifelong best friends," Waldron told Axios at the time.
- Playco has since released games on such other platforms as TikTok and acquired Goodboy Digital, a maker of an HTML5 game engine, one of the technologies it views as key to making games quickly accessible.
Between the lines: In some ways, Playco is a bit of a "Zynga 2.0," given the shared belief in social games that can be easily accessed.
- "It’s very difficult to get two people into a single game in the App Store," Carter previously told TechCrunch of the problem Playco is addressing.
- "We're on an operational mission of trying to build a game that more than a billion people play," Carter told Protocol last year. "So right now we're very, very committed to distribution platforms that can achieve very, very, very large audiences."
- So unlike Zynga's Facebook history, Playco is multi-platform, wherever social networks may be.
The bottom line: Meta might be feeling the heat from a growing number of critics, but some companies are still finding value in taking its money and partnering up.