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Israeli game maker hits jackpot despite accusations of cashing in on kids

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A leading Israeli video game startup set to be acquired by a Swedish firm in a highly publicized deal has in the past been criticized by consumer advocates for the way it marketed digital games to children.

CrazyLabs, a developer and publisher of mobile games, was named several times in a 2018 complaint filed with the United States Federal Trade Commission by a group of 22 US consumer protection groups, concerning allegedly manipulative features in apps for children available in the Family section of Google’s Play Store.

On August 5, Swedish gaming giant Embracer Group announced that it will acquire CrazyLabs, which had the third-most downloads of all mobile gaming publishers in 2020, for an undisclosed amount. The Israeli firm has recorded 4.5 billion downloads to date and has over 110 million monthly active users, the announcement said. CrazyLabs generated revenue of $152.9 million between July 2020 and June 2021, Embracer Group added.

One of the beneficiaries of the sale will be Knesset member Amir Ohana of the Likud party, a former justice minister and internal security minister. Ohana’s husband Alon Hadad invested in the company during its first funding round in 2011.

CrazyLabs, formerly known as TabTale, was cited in the complaint to the FTC as a company that marketed digital games to children under 13 in a way that failed to protect their privacy.

The complaint alleged that CrazyLabs transmitted children’s data to third parties in possible violation of the Children’s Online Privacy Protection Act (COPPA), a US law that requires parental consent to collect personal data from children under 13.

CrazyLabs was further criticized for its “freemium” money-making model, whereby children can download its apps for free, but are then encouraged to watch ads or make in-app purchases in order to make progress in a game.

The company produces casual, lifestyle and hyper-casual games, which it defines as “lightweight, instantly playable and infinitely replayable — making them highly addictive and very engaging.”

The company’s hyper-casual games had over 480 million downloads last year, including with such hits as “Soap Cutting,” “Acrylic Nails,” “Tie Dye” and “Run Sausage Run.”

Its casual games are more complex, including storylines, progression and mission systems, the company said. Some of its leading titles include “Jumanji,” “Hotel Transylvania Adventures” and “Super Stylist.”

“Super Stylist” was the most downloaded fashion game last year, and has had over 60 million downloads to date.

CrazyLabs told The Times of Israel that “CrazyLabs takes and has always taken its obligation to comply with applicable laws (including COPPA) very seriously. With the assistance of relevant experts, we believe we have instituted reasonable, effective, and comprehensive programs and procedures to........

© The Times of Israel

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