• by Gavin O'Malley  @mp_gavin, May 5, 2010

Cloud-based interactive TV provider ActiveVideo Networks on Wednesday announced the acquisition of gaming platform TAG Networks. Financial terms of the deal were not disclosed.

With the deal, ActiveVideo is aiming to extend its CloudTV development platform to include casual games -- a growing and profitable segment of the entertainment market.

"We believe that the games category, which exceeds $25 billion, is among the most significant growth opportunities for our cable, programmer and CE manufacturer customers," said Jeff Miller, president and CEO of ActiveVideo Networks.

The combined entity will attempt to leverage TAG's technology and content portfolio with ActiveVideo's CloudTV platform to support both casual and "twitch," i.e. fast-motion, games.

Per the deal, TAG Networks' management team and staff have been relocated to ActiveVideo's corporate headquarters in San Jose. Sangita Verma, CEO and founder of TAG Networks, and Robert Craig, chief creative officer and founder, will now serve as president of TAG Games and chief creative officer of TAG Games, respectively, for ActiveVideo Networks. Meanwhile, TAG chief technology officer Cliff Mercer will serve as SVP of Engineering at ActiveVideo.

Recent data from TNS Intelligence -- regarding average daily minutes (viewed) for 2009 -- indicated that TAG households averaged 116.5 minutes per day in engagement with the channel.

Casual games are serious business these days. For one, they are believed to be largely responsible for continued traffic gains at Facebook. Over the past year, traffic to the social network increased 185% compared to the same week last year. As a result, Facebook surpassed Google in terms of overall traffic for the week ending March 13, according to Hitwise.

Perhaps in response, Google late last month announced the acquisition of an Israeli startup named Labpixies, which develops casual games for both the Web and mobile devices. Terms of the deal were not released, but an Israeli news source reported that Google paid $25 million for the company.