China’s Shanda Buys U.S. Gaming Firm Mochi Media

Mochi Media character

Shanda Games, China’s second-largest online gaming company, has announced an $80 million cash-and-stock deal to acquire U.S. gaming firm Mochi Media. Shanda hopes to leverage Mochi’s stable of browser-based game and extend them to Chinese and international audiences, giving it an edge in the competitive Chinese online games market.

San Francisco’s Mochi Media has produced some 15,000 online games, the bulk of which are casual, browser-based Flash games designed to attract users to Web sites and social networking services and keep them coming back for more. The company gets most of its revenue from online advertising, and claims to have nearly 140 million users. Mochi games feature elements like leaderboards, virtual goods and consumables, and even virtual currencies to keep users coming back.

Shanda’s primary competitor in the Chinese market, Tencent Games, has overtaken Shanda in the last year or so, primarily through a large portfolio of browser-based games.

The acquisition highlights the growing financial might behind China’s burgeoning online entertainment industry: according to market analysis firm iResearch, the Chinese online gaming industry alone was worth about $4 billion in 2009.