Lolapps merges with 6waves to build social gaming powerhouse

Two leading social game companies — 6waves and Lolapps — are merging today in order to form a more powerful challenger to market leaders such as Zynga and Electronic Arts.

It’s a sign of the inevitable consolidation in social games, where the reach to a large number of users matters the most. In this case, the combination could create an entity that has a versatile business strategy, publishing both internally-produced social games as well as those created by third-party developers.

Hong Kong-based 6waves is known for its third-party publishing of Facebook games, while San Francisco-based Lolapps has excelled at creating games such as Ravenwood Fair and its Ravenstone Mine expansion game.

Combined, the companies will reach more than 35 million monthly active users on Facebook. At the moment, that’s enough to make the combined company into the No. 2 game publisher on Facebook, behind Zynga with 274 million monthly active users. The move will clearly give the combined entity more distribution power.

Lolapps has worked with 6waves for some time, using its resources to develop its Raven series of games along with game developer John Romero, who has since founded his own studio called Loot Drop. Arjun Sethi, chief executive of Lolapps, said in an interview his company will continue to focus on internally produced games built with the Fliso Engine, a Flash game development tool that makes it easy to create large worlds with lots of moving animations. Lolapps recently acquired the engine from Sean Cooper Games and hired its creator.

Rex Ng, CEO of 6waves, said in an interview his company has a big presence in Hong Kong and Japan and will help the combined company expand its games to Asia. Altogether, the companies will have 120 people, mostly in San Francisco. The new company will go by the name 6waves Lolapps, and its management team will consist of the six top leaders of both firms. Sethi will report to Ng.

“We’ll be able to help our developers create games much faster than before,” Ng said.

Users will now have access to a larger catalog of games and an opportunity to interact with larger numbers of social game players. Developers who work with both companies will also be able to access the Fliso Engine and take advantage of publishing services, localization, analytics and cross-promotion. The Fliso engine will be available for license.

Both companies have been profitable to date and grew very fast in the early days of Facebook through apps such as quizzes. 6waves is a venture-backed company that has apps on Facebook and the Yabage network in Japan. It helped build games such as Kabam’s Kingdoms of Camelot and Mystery Manor. 6waves has worked with dozens of third-party game developers, Ng said.

Lolapps was founded in 2008 and has funding from Polaris Venture Partners and Ron Conway. Lolapps itself has 25 million monthly active users, thanks mainly to its Ravenwood Fair and Ravenstone Mine games. Later this year, Lolapps will launch the Fliso-based Ravenshire Castle and Ravensky City expansion games. The price of the deal was not disclosed.