A Desperate Zynga Acquires a Company
Zynga (NASDAQ:ZNGA) is down over 67 percent since its IPO in December, and eight key players have jumped ship since August. To try to patch up its sinking ship, the company has gobbled up A Bit Lucky, a mid-core game maker that will hopefully open up a new, lucrative demographic, and bring in some much-needed talent.
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“Our conversations with industry contacts suggest that monetization for mid-core games could be meaningfully higher than for casual games,” Lazard Capital Markets analyst Atul Bagga wrote in a research note. A Bit Lucky is working on a multi-platform, multi-player game called “Solstice Arena.” Its previous titles were “Lucky Train” and “Lucky Space,” which were both abandoned in favor of the new game.
Zynga is rumored to have paid between $20 million and $25 million for the company, and absorbed its entire team of over 20 people. These new employees could help shore up the talent gap Zynga faces. Most recently, the company lost Wilson Kriegel, who came on board with Zynga’s acquisition of Omgpop, the maker of “Draw Something.”
Zynga has climbed nearly 10 percent in the last five days, but still faces declining activity for its older titles. The company is also involved in a legal dispute with game giant Electronic Arts (NASDAQ:EA) over the likeness of “The Ville” and “The Sims Social.”
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