Zynga has reached a deal to acquire NaturalMotion, the UK-based gaming company behind Clumsy Ninja and other titles, for half a billion dollars. The announcement came this afternoon, alongside the sad news that Zynga would be laying off 15% of its work force.
The deal is interesting for a few reasons. The first is the price tag: $527 million in cash and Zynga stock. That makes this the company’s largest acquisition to date—more than twice its OMGPOP buyout. And two, it signals a change of direction for the game-maker…
You see, Zynga has always dabbled in the multiplayer-social game space: Words With Friends, FarmVille, Draw Something. NaturalMotion, on the other hand, is known for its cutting edge graphics and physics technology, used in games like the popular Clumsy Ninja.
So is Zynga looking to take things in a new direction? From the company’s blog:
“Our goal from a content perspective is to create top hits that engage mainstream global audiences. Our winning aspiration is to be the industry leader by delivering more #1 games than any other competitor. To accelerate these efforts and build on our core growth strategy, I’m pleased to share the announcement that we have signed an agreement to acquire NaturalMotion, a leading mobile game and technology developer based in Oxford.
NaturalMotion expands Zynga’s creative pipeline, accelerates our mobile growth, and brings next-generation technology and tools to Zynga that will fast-track our ability to deliver consumers more hit games. Bringing Zynga and NaturalMotion together is a bold step in the right direction at the right time.
The NaturalMotion team is led by renowned technology innovators, including Chief Executive Officer and Co-Founder Torsten Reil and Vice President of Games Barclay Deeming. Over the last ten years, they have proven their ability to blend their breakthrough technologies like Euphoria, with high-fidelity animation to create delightful mobile hits. Their games CSR Racing in the Racing category and Clumsy Ninja in the People simulation category have both achieved top of the chart status. With NaturalMotion, we will – in total – have five top brands and capabilities in Farm, Casino, Words, Racing and People.
Combining NaturalMotion’s strengths with Zynga’s ability to develop breakthrough social features while sustaining live games over time, offers us a huge opportunity to redefine the gaming industry and deliver consumers blockbuster entertainment experiences.”
Initial reactions to the announcement have been mixed, but investors seem happy. Zynga’s stock price is up 23% in after-hours trading following the news of the acquisition and impressive quarterly earnings. Surprisingly, Words With Friends had its best quarter ever.
It’ll be interesting to see where Zynga goes from here, and what it has in store for NaturalMotion’s games and—more importantly—technology. Honestly, with the combination of Zynga’s ability to build engaging content and NaturalMotion’s tech, this could end up being a win.
What do you think?