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Zynga branches out to new games after Draw Something disappointment and poor quarterly report
Zynga may be having a rough go of it lately but the company that was, and probably still is, the most well known mobile game developer in the U.S. is not going down without a fight.
Zynga has purchased “midcore” games developer A Bit Lucky, it was announced Monday.
Terms of the deal were not disclosed, but Zynga called the acquisition “small,” and said that all of the 20 or so employees at A Bit Lucky will be joining the Zynga team.
So-called “midcore” games are those that fall between those played by hardcore gamers, and those played by gamers who are more casual. These games serve as a bridge between the two; they have smaller audience, but those audiences pay more for the games.
Midcore games are a bit of step up from Zynga’s usual offerings, including its “Ville” series and Words With Friends.
A Bit Lucky, makers of Lucky Space and Lucky Train, is currently in the midst of developing a new multi-player, and multi-platform, game called Solstice Arena, which the team will continue to development while being a part of Zynga.
San Mateo, California-based A Bit Lucky, has raised $7.6 million since it was founded in 2010 by Frederic Descamps and Jordan Maynard.
The company received $2.6 million in venture funding in March 2010, and raised $5 million from South Korean gaming company Nexon. Other investors include Delicious founder Joshua Schachter, Felicis Ventures, Founder Collective, Google M&A head David Lawee, IGN co-founder Mark Jung, Lerer Ventures, and SV Angel.
Lawee and Zynga co-founder Andrew Trader each took a seat on the company’s board, alongside a seat for Nexon.
Zynga posted an e-mail sent from Descamps to his friends in the industry, in which he outlined why he made the deal with Zynga.
“After exploring various options and talking to a lot of interested partners, Jordan and I are convinced Zynga is the best choice for us. Zynga sees something very special in A Bit Lucky and the team we have assembled,” he wrote.
“Likewise, why we picked Zynga is pretty simple: it was truly a meeting of the minds. At Zynga, we met people like us: passionate hardcore game developers animated by a strong entrepreneurial spirit.”
What this purchase means for Zynga
Zynga, by purchasing a midcore game company, is perhaps signaling that it no longer has faith in the casual games that were once its bread and butter. It is also, perhaps, admitting what many people already knew to be true: its purchase of the once popular Draw Something has turned into a fiasco.
Draw Something was an instant success, seeing 35 million downloads in its first six weeks. This led to its developer, OMGPOP, being purchased by game development company Zynga for $180 million in March.
The purchase initially looked like a winner when Draw Something became the top paid app in the iTunes store. Numbers fell off severely after that, though, as the game lost seven million users by June. The purchase of a small game company that had only seen a single success led to criticism of Zynga for being too hasty and overspending.
That, on top of Zynga’s other woes, including Zynga, the biggest mobile game developer in the U.S. has been hard hit a bad earnings reports that caused it stock to plummet 40%, and then accusations of insider trading after it was revealed that Zynga executives, including CEO Mark Pincus, cashed out part of their stock in April, months before the stock cratered on the disappointing earnings report.
Zynga also currently finds itself in a legal battle with Electronic Arts, who are alleging that Zynga violated copyright infringement with its new game, called The Ville.
And then there has been the exodus of people leaving the company, including Chief Creative Officer Mike Verdu; Chief Operating Officer John Schappert; Alan Patmore, general manager of CityVille; Erik Bethke, general manager of Mafia Wars 2; Ya-Bing Chu, a VP in Zynga’s mobile division; and Jeremy Strauser, a general manager.
Zynga tried to prevent its staff from leaving by offering stock options to all employees. According to Zynga’s form S-8, the company set aside 43,295,554 shares for its employees, at prices from $2.53 to $2.97 per share.
Zynga seems to think that the way to turn things around now is to evolve the types of games they are offering. Only time will tell if it works.
Zynga’s stock was down 3.14% in regular trading money. Shares are now selling for $3.08.
Zynga could not be reached for comment.
(Image source: https://www.abitlucky.com/)
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