RIM Acquires Scoreloop to Attract Developers

June 14th, 2011 by Trefis Team
11.98
Trefis
RIMM: Research In Motion logo
RIMM
Research In Motion

Research in Motion (NASDAQ:RIMM) recently acquired Scoreloop, a mobile social gaming company that helps mobile game developers add social and in-app billing features to their games. [1] It is an important move by RIM for the improvement of its gaming and app ecosystem, which trails Apple’s (NASDAQ:AAPL) iOS and Google’s (NASDAQ:GOOG) Android app ecosystems. Over the past few months, RIM has struggled to compete in the smartphone market while its US smartphone market share slumped from around 30% in January to 26% in April 2011. [2] RIM desperately needs some innovative measures to overcome competition and spur investor confidence in order to boost its stock, and Scoreloop could be one of these moves. Our $51 estimate  for RIM stock is about 40% above market price.

Scoreloop Could Help RIM Attract Developers

Software applications and gaming platform quality have started to play an important role in the smartphone revolution. RIM’s app ecosystem has not developed to the extent the company would want it to be and trails Apple with more than 350,000 apps, [3] as RIM has only around 20,000 apps in its app store. [4]

Attracting developers plays an important role in building the app ecosystem and drawing in more users, hence attracting developers is important from RIM’s point of view. Scoreloop allows game developers to add social content such as achievements and awards along with revenue-generating services like in-app purchases. Through this acquisition, RIM gets a chance to attract more gaming developers which will in turn help develop its ecosystem. Its ecosystem development is a critical aspect in driving its mobile phone market share, and RIM can make use of this acquisition to drive BlackBerry sales.

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See our complete analysis for RIM stock here

Notes:
  1. RIM welcomes Scoreloop, June 7th 2011 [↩]
  2. comScore Reports April 2011 U.S. Mobile Subscriber Market Share, June 3rd 2011 [↩]
  3. Apple FY Q2 2011 earnings conference call transcript, SeekingAlpha, April 20th 2011 [↩]
  4. BlackBerry apps count, February 2011 [↩]