Omgpop executive reportedly leaving Zynga

Steven Loeb · September 18, 2012 · Short URL:

Is this a signal that Zynga is moving away from casual gaming for good?

Yesterday, Zynga purchased midcore gaming company A Bit Lucky, a potential sign of a complete redirection for the company. Zynga signalled that it may be  moving away from casual mobile games, and more toward games that have a stronger fan base. Now, only a day later, one of the executives at the company that precipitated Zynga’s move from its previous model is leaving. Could this be another sign that Zynga will be moving in a new direction?

Wilson Kriegel, the chief revenue officer of Omgpop, has left the company, VentureBeat reported Tuesday.

VatorNews contacted Zynga for confirmation, but we are still waiting for a reply.

If the report turns out to be true, this would be just another in a long line of employees to leave Zynga in the past few months, despite all efforts by Zynga to retain them.

Draw Something was something of an instant phenomenon, being downloaded 35 million times in its first six weeks alone after debuting in February.

This success led to its developer, Omgpop, being purchased by Zynga for $180 million in March. While the purchase initially looked like a winner when Draw Something became the top paid app in the iTunes store in April, things quickly fell apart after that.

Numbers fell off severely and the game lost seven million users from May to June alone. Suddenly, the purchase of a small game company that had only seen a single success led to Zynga being severely criticized for being too hasty and overspending on an unproven property.

As Draw Something’s numbers fell, so did Zynga’s stock.

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There were ideas floated around to revive the property, including turning the game into a TV show from Ryan Seacrest. In June, Zynga announced that it would be partnering with Jennifer Lopez and Enrique Iglesias to promote the launching the game in 12 new languages. But the once hot game fizzled, and it took Zynga down with it.

In its next quarterly earnings report, Zynga reported a loss of 3 cents a share, or a 1 cent profit on an adjusted basis, on revenue of that grew 19% to $332 million, far short of analysts' expectations of 5 cents a share on revenue of $345 million. Zynga also sharply reduced its forecast, dropping its full-year bookings to $1.15 billion to $1.23 billion. Zynga had previously estimated bookings to be $1.43 billion to $1.5 billion.    

The bad earnings report led to the company’s stock diving 40% to $3.06. And then people began to leave.

First was Zynga’s Chief Operating Officer John Schappert who resigned in August. No explanation was given, with the company saying in an SEC filing that the resignation was “not tendered in connection with any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.”

Zynga attempted to get its employees to stay by offering them stock options. 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. Of course, given the low price of the stock, it should be too surprising that it did not work.

Others who have left include 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.

And now, it seems, a member of the very team that started Zynga’s slide has decided he has had enough.

There is something a little ironic about a member of the Omgpop abandoning Zynga, as it was Zynga’s purchase of Omgpop that began its downfall. Or perhaps it is just another signal that Zynga really is done marketing casual games.

Zynga’s stock is currently up nearly 3%, trading at $3.16 a share.

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