Acquisitions

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Acquisitions

5. Acquisitions

On September 11, 2015, we acquired Rising Tide Games, a provider of social games that we plan to use to release new social casino titles, for purchase consideration of approximately $44.2 million, which consisted of cash paid of $22.4 million and contingent consideration with a fair value of $21.8 million as of September 30, 2015. The contingent consideration may be payable based on the achievement of certain future performance targets during the three year period following the acquisition date and could be up to $140.0 million. We will record changes in the fair value of contingent consideration liabilities within operating expenses in our consolidated statement of operations each future reporting period.

For further details on our fair value methodology with respect to contingent consideration liabilities, see Note 3 – Fair Value.

The following table summarizes the purchase date fair value of net tangible and intangible assets acquired from Rising Tide Games (in thousands, unaudited):

	Total
Developed technology, useful life of 5 years	$	27,000
Net tangible assets acquired (liabilities assumed)		2,445
Goodwill		25,050
Deferred tax liabilities		(10,300	)
Total	$	44,195

Goodwill, which is not deductible for tax purposes, represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, and is primarily attributable to the assembled workforce of the acquired business and expected synergies at the time of the acquisition.

The information above provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, however, the preliminary measurements of fair value are subject to change including in the area of income taxes payable and deferred taxes which may change subject to the completion of certain tax returns.