Zynga execs anticipate more deals on the scale of OMGPop

Bloomberg report explains how failed $2b Rovio deal created culture of acquisitions

Executives at the social gaming giant Zynga expect more deals on the scale of its acquisition of OMGPop in the next three to five years.

Speaking to Bloomberg, CEO Mark Pincus and and EVP of business and corporate development Barry Cottle indicated that the $180 million paid for the Draw Something developer was not an isolated incident - indeed, Pincus predicted "a few" more deals of a similar size.

"We love finding great, accomplished teams that share our mission and vision," Pincus said. "If we ever see breakout opportunities that massively accelerate social gaming at Zynga, we'll aggressively pursue those, too."

According to a source close to the deal, Zynga fought off competition from the Walt Disney Co., Gree and DeNA to buy OMGPop, though Bloomberg was unable to get official confirmation from any of the parties involved.

"If we ever see breakout opportunities that massively accelerate social gaming at Zynga, we'll aggressively pursue those, too"

Mark Pincus, CEO, Zynga

Zynga has been very active in terms of acquisitions over the last 2 years, spending $147.2 million for 22 companies during 2010 and 2011 in addition to the money paid for OMGPop.

According to another source, the company's focus on effective acquisition practices was spurred on by a string of failed bids, principally a failed $2 billion for Rovio Entertainment.

"We're sitting in a very advantageous position," Cottle added. "We have a significant amount of cash, we have no debt, and we have access to debt to be as aggressive as we need to be."

And in the current landscape of social game development aggression is exactly what's required. Ever since Facebook closed the viral channels exploited by companies like Zynga in social gaming's early days the cost of user acquisition has spiralled.

A key part of Zynga's solution to the problem is Cottle's highly effective approach to acquisitions. The article claims that the company brings HR executives to meet potential candidates, makes its technical staff look for solvable problems with their technology, and offers reassurance that the needs and traditions of each team will be honoured.

"We bring a ton of people in to listen and understand what's really religious about their organisation," said Cottle. "It's important that the secret sauce does not change after they become a part of Zynga."

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Latest comments (6)

Bruce Everiss Marketing Consultant 10 years ago
I keep saying this: they should buy Sega. They would hardly notice the cost of doing so.
All that fantastic heritage IP that is currently not doing justice to anyone.
Mostly originally written for fairly simple machines.

Let the Japanese keep the pachinko side of the business.
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Terence Gage Freelance writer 10 years ago
And as someone else pointed out before Bruce: Sega's IPs mean nothing to the average Zynga user. How many people play CityVille or whatever and really know or care about Sonic? And more importantly; besides Sonic, what brands would Zynga be getting - Yakuza? House of the Dead? Chu Chu Rocket? Phantasy Star Online? OutRun? These are hardly brands that are going to interest a business in Zynga's position.
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Terence Gage Freelance writer 10 years ago
"If we ever see breakout opportunities that massively accelerate social gaming at Zynga, we'll aggressively pursue those, too."

"And if they refuse to become part of Zynga, we just steal their ideas and make our own clone anyway!" Pincus sadly did not add.
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Fran Mulhern , Recruit3D10 years ago
Yeah, they we can all look forward to Sonicville.

Brilliant idea, Bruce.....
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Private Industry 10 years ago
Bruce in my own personal opinion I rather play the worst Sonic game that Sega did than play any Zynga games.

I don`t want Zynga own a company like Sega. They may not be anymore as great as they where but they still make great games that for me are far above the stuff that Zynga is doing. Valkyria Chronicles is great, Yakuza and Bayonetta as well, Sonic is getting better again and once in a while they have some good games that unfortunately don`t sell that good like Resonance of Fate, Vanquish or Binary Domain to name a few.

Not a single one of those IP`s should be with Zynga and none of those games would be valuable to Zynga because they can`t rip off people with any of the IP`s to squeeze out the customers for every single penny they have. The day Zynga would own a company like Sega would be the worst day for gaming to date. I had every Sega console since the Mega Drive and it would be horrible to see them being part of Zynga.
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Fran Mulhern , Recruit3D10 years ago
Facebook: Total War?

Yeah, exactly:)
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