Zynga acquires Draw Something developer OMGPOP

If you haven’t heard of Draw Something, it won’t be long before you do – this rising star of a social game has recently hit over 35 million downloads with 15 million active users. The Pictionary-like game spans multiple iOS, Android, and Flash-enabled browsers through the power of Facebook, resulting in a mechanically and conveniently accessible experience that seemed destined for success.

Zynga has clearly taken notice as they announced their acquisition of Draw Something’s developer, OMGPOP, for a sweet $210 million. This follows a familiar pattern, as Facebook’s greatest social behemoth bought Words With Friends developer Newtoy a few years ago for a much smaller amount. Clearly that purchase was a success, as the “With Friends” branding has now extended beyond the Scrabble-like bounds of Words.

With OMGPOP firmly in hand, Zynga has another powerful tool in their toolbox. Actually, they have a new toolbox full of tools considering OMGPOP is the creator of 30+ other social games that have seen varying degrees of success in the past. Clearly, this move goes beyond capitalizing on the present but rather harnessing a stable of new games to bolster Zynga’s growing platform of titles on their own site.

Source: Zynga | Via: GigaOm

  • http://amostagreeablepastime.wordpress.com/ OldGaulian

    There is a particular school of economic thought that in order to grow (or increase its propensity to grow), businesses have to acquire other businesses.  The market has certainly responded to the purchase positively to the purchase, not to mention the convenient timing of the purchase, just before a second public share offering.  But I am honestly a little worried that the buoyancy of the market is in response to inflated expectations of the impact that the purchase of a developer that, until now, hasn’t to my knowledge had any profile even though it has released more than a few games.  We’ll see – I would envisage the only way is down for shares of this type as the market begins to respond to what I imagine to be an onslaught of public offerings of mobile-based developers.

    • http://www.gamethingdaily.com/ Jonathan Downin

      Thanks so much for taking time to leave an intelligent, well-worded response.

      It is a questionable strategy considering OMGPOP’s 1-hit wonder status, despite the company’s history a producing a number of previous titles. On the other hand, OMGPOP does have a huge awareness in the casual space, and viewed as a pure purchase of a customer base may make the acquisition make sense even if the brand is simply co-opted. 

  • http://amostagreeablepastime.wordpress.com/ OldGaulian

    I would imagine that Zynga paid in cash for what is their second biggest acquisition, perhaps trying to reduce interest liability on cash holdings?  I think you’re right though, in terms of what could be viewed as directly earnings accretive, the customer base alone would probably be worth as much as was paid.  But we can’t for a minute rule out a short-term type investment rather than a long-term ‘we want them as in-house talent’ type acquisition. 
    All speculation, really.  Who knows is probably the right response to this situation.