Zynga Acquires OMGPOP for a Reported $200 Million

After speculation this week from industry insiders, gaming giant Zynga confirmed today that it has acquired competitor OMGPOP. The announcement was made on a call with Zynga executives this afternoon from OMGPOP’s offices, and while they didn’t disclose the amount of the sale AllThingsD is reporting it’s a $200 million deal. TechCrunch reported on Monday that OMGPOP was in acquisition talks with Zynga, but neither company confirmed any details until today. David Ko, Chief Mobile Officer at Zynga, made the announcement in conjunction with OMGPOP CEO Dan Porter, and Ko called the game “super fun.”

“We always want to deliver the best experiences for our players anytime and anywhere,” Ko said. “What we’ve seen here with Draw Something is something that’s truly special, with players all over the world. We want to continue to support this amazing and creative team and help them continue getting the game to getting aout to additional players.” Ko said Zynga has always been “huge fans” of the OMGPOP team, but didn’t clarify if it was an acquisition target before the release of Draw Something. Ko did say that the acquisition wasn’t due solely to Draw Something, but rather “a combination of the game, the team, and having a shared vision of social.”

“We’re super excited to be a part of Zynga,” OMGPOP’s Porter said. When asked why they chose to work with Zynga over other potential acquirers, Porter said it was a matter of asking “who can support us and give us a platform to keep doing what we’re doing.” “It was clear that this had the potential to be a really great partnership,” he said.

OMGPOP, which launched in 2006 as iminlikewithyou, is behind the wildly popular social game Draw Something, which is like a mobile Pictionary. As reported in the announcement today, the iOS version of the game has amassed over 35 million users since launching less than six weeks ago, and users have created over one billion drawings in the last week alone. The app surpassed Zynga’s own Words With Friends game in number of users on Facebook (according to AppData), and is now the top free app, top paid app and top word game in over 80 countries. Though Draw Something has garnered the most attention lately, the company has released 35 games in total.

OMGPOP’s headquarters will remain in New York City, and CEO Dan Porter will become Vice President and General Manager in NYC. In a release Zynga reported that the 40-person team will focus on building new mobile IP and strengthening its existing portfolio of games. Porter said this definitely isn’t an overnight success for OMGPOP. “For the last four years we’ve been working to make social games across a number of platforms,” OMGPOP’s Porter said. The company previously had 20 million registered users since launching, and have eclipsed that with just one game. “Draw Something is by far the biggest game we’ve ever made,” he said.

The OMGPOP acquisition comes just over three months after Zynga debuted their IPO, and a month after they released a less-than-stellar first earnings report. The company reported a $435 million net loss in the report released February 14th, but also reported that daily active users increased from 48 million in the fourth quarter of 2010 to 54 million in the fourth quarter of 2011, up 13 percent. In total there are 240 million people playing Zynga games each month around the world. The company recently announced new online gaming destination Zynga.com, as well as the Zynga Platform, which will allow them to showcase leading games from third-party developers.

Yesterday Airbnb announced its acquisition of UK competitor Crashpadder, and Groupon has acquired several local competitors, including German Samwer brother clone CityDeal. This is just the latest in large companies snapping up their smaller but often regionally or singularly successful companies. When asked whether Zynga will continue to create wildly popular games like Farmville in-house, or whether they’ll just acquire any company that stumbles upon a hit, Ko was clear about their in-house strategy (the company has released 15 games in the past two quarters). “We’ve created lots of games that are social and fun, we’re going to continue focusing on that.”

 

 

 

Erin Bury

Erin Bury

Erin has covered startups and technology for over three years in publications including Sprouter Weekly, The Globe and Mail, Business Insider, Mashable, and VentureBeat. She also writes a regular startup column for the Financial Post, and is a technology expert on CTV News Channel. Before BetaKit Erin worked as Director of Content & Communications at Sprouter from its launch in 2009 until its acquisition by Postmedia Network Inc. She was recently named one of Marketing Magazine's 30 Under 30 in 2012.

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