Zynga finally announces Softbank investment

Ronny Kerr · July 29, 2010 · Short URL: https://vator.tv/n/10e6

$150 million from Japanese telecom company ensures deployment of Zynga games overseas

zyngaConfirming news over a month old, Zynga on Thursday announced that Japanese telecommunications and media corporation Softbank has completed a $150 million investment in the social gaming company.

The press release for the announcement says Zynga and Softbank have formed a new joint venture called Zynga Japan that will develop and distribute social games in Japan.

The new funding, added to a reported $100-200 million from Google, a confirmed $180 million from Russian investment firm Digital Sky Technologies, and earlier (comparatively) small rounds, brings the San Francisco-based startup's total raised funds to around $500 million.

Valuations for Zynga, according to the most recent market approximations, hover in the $5 million range.

While two other popular social gaming startups--Playfish and Playdom--exited via acquisitions, Zynga happily takes on more investments to drive its own goals. Last November, Electronic Arts bought Playfish for at least $275 million in cash and $25 million in equity retention arrangements with an extra $100 million waiting for Playfish's owners depending on whether the studio meets certain performance milestones by the end of 2011. Similarly, Disney this week agreed to pay $563.2 million up-front for Playdom, with an additional $200 million waiting for Playdom's owners if set milestones are reached.

And even though Zynga seems to be skirting acquisition offers, don't think the startup has any plans for going public. CEO Mark Pincus made his opinion crystal clear at our Vator Splash event in February:

"I always scratched my head and said, 'Why?' Why on Earth would you go public if you want your company to be sustainable and to last? I get really confused why anyone would go public. I've gone public before. It's not an exit, it's an entry."

Though not taking any exits yet, Zynga's latest Asia partnership loosens the company's dependence on Facebook, a smart move for the blooming social startup.

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Playfish is a social games company that creates games for people to play together.

Founded in October 2007 by casual and mobile games veterans and backed by $3M in seed funding, we believe games are more fun when played with friends and family. So we are working on combining the best elements of casual games, social networks, MMOGs and virtual worlds to create entirely new, more social ways of enjoying great games together.

Traditional computer games focus on standalone game play on consoles, your PC or on your mobile. Games that do allow you to play together with others online normally require you to buy the game, go online and try and find like-minded new friends who are also playing the game. This is something that usually only the most dedicated gamers are prepared to do.

Our social games are different. Social games allow you to play together with real-world friends and family using the infrastructure built by social networks. This is in some ways a return to the roots of games. You play with the same people you would play cards, board games or go bowling with in the real world. Sharing the game experience with friends makes it more compelling and fun.

At Playfish we believe social games are a big part of the future of the video games industry, and are working hard to be the leading company in this emerging sector.

Playfish is headquartered in London, UK with offices in Beijing, China and Tromsø, Norway.



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Zynga is the largest social gaming company with 8.5 million daily users and 45 million monthly users.  Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Yahoo! and the iPhone, and include Texas Hold’Em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist.  The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel.  Zynga is headquartered at the Chip Factory in San Francisco.  For more information, please visit www.zynga.com.