NEW YORK (Reuters) - PopCap Games Inc, the maker of popular smartphone and Facebook games “Bejeweled” and “Plants vs Zombies,” is gearing up to file for an initial public offering by the end of the summer, its top executive told Reuters on Monday.
An IPO could give investors a way to gain a slice of the fast growing digital games market.
The news comes on the heels of the Angry Birds game developer, Rovio, which said it would go public in the next five years in the United States, likely on Nasdaq.
PopCap Chief Executive David Roberts said the company hopes to file for an IPO between early September’s Labor Day and the November Thanksgiving holiday to get ahead of other high profile Web offerings. It has not made a final decision.
The company is auditioning bankers, who are giving “test road shows” and presenting slides to potential institutional investors to gauge the viability of the IPO.
Roberts added that if the market turns sour, the company would delay its offering.
“But if we’re ready in October and the market is crazy and going down and bad, then we wouldn’t do it,” he said.
The Seattle-based company has been profitable for 10 years since its founding, the CEO said. It generated $100 million in revenue 2010, up from about $80 million in 2009 and about $50 million in 2008.
“I suspect a Nasdaq listing is more likely but we’ve spoken to the Nasdaq and the New York Stock Exchange and they’ve both made pitches to why we should list with them,” Roberts said.
Roberts said it might be attractive to go public before Zynga, the leader in social games.
“The market is very hungry for IPOs now,” Roberts said.
Other publicly traded companies that focus on mobile games are Gameloft, which is listed in Paris, and Glu Mobile Inc which is listed on Nasdaq.
Roberts said that 80 percent of the company’s revenue comes from digital sales of its games, while 20 percent of sales are in retail stores such as Target and Best Buy.
PopCap, which has 400 employees, said it had the fourth grossing Apple iOS app in 2010, two spots below “Angry Birds.”
The company said its growth drivers in the next three years will come from people switching to smartphones, the rapid adoption of Facebook, which features its games, and opportunities in Asia, where it is launching four games this year.
Since August 2010, its monthly revenue from social games was $2.5 million, Roberts said, adding that more than 2.5 billion “Bejeweled Blitz” games are being played every month.
The company said it is aiming to increase its revenue in Asia to about 30 percent of total revenue in 12 months from its current level of about 5 percent. It has 80 employees in China and said it would want to double or triple that amount over the next 12 months.
“We might have to scale pretty dramatically there,” Roberts said referring to China.
The company said it is also considering expanding its operations to South America as well.
Mobile game sales are expected to grow to $11.4 billion by 2014, according to research firm Gartner, and will keep eating into the revenue of traditional game publishers, those that create action or sports games played on consoles and TV sets.
Reporting by Liana B. Baker; Editing by Richard Chang and Tim Dobbyn