Social gaming firm Zynga has announced the purchase
of UK game-maker NaturalMotion for $527m (£320m).
Oxford-based NaturalMotion has had a string of mobile
game hits, such as CSR Racing and Clumsy Ninja. Its
purchase gives Zynga an entry into the lucrative mobile
games market.
As news of the deal emerged, Zynga also reported a
loss of $25m for the fourth quarter.
It said it would trim its workforce by 15% - equivalent
to about 314 jobs.
Mobile help
"We believe that bringing Zynga and NaturalMotion
together is the right step at the right time," said Zynga
chief executive Don Mattrick in a statement .
"Our acquisition of NaturalMotion will allow us to
significantly expand our creative pipeline, accelerate our
mobile growth and bring next-generation technology and
tools to Zynga that we believe will fast-track our ability
to deliver more hit games."
In a note to employees, Mr Mattrick highlighted that
with the acquisition, Zynga will now have five top
gaming brands: Farmville, Casino, Words with friends,
CSR Racing and Clumsy Ninja in the "people" category.
NaturalMotion's Clumsy Ninja has been rated more than
78,000 times in the US and UK version of Apple's App
Store - the vast majority of them positive.
New leadership
Mr Mattrick also told employees the acquisition gives
Zynga access to NaturalMotion's Euphoria technology,
which helps create realistic motion for characters in
movies and games.
The takeover of the 13-year-old firm is being interpreted
by some as Mr Mattrick's bet on character-driven
intellectual property.
As part of the terms co-founder of NaturalMotion,
Torsten Reil, will stay on and report to Mr Mattick, and
new games will continue to be released under the
NaturalMotion brand.
Zynga has struggled to replicate the success it has had
with desktop games Farmville and Mafia Wars and has
been unable to generate new hits on smartphones.
This is seen as a crucial weakness, as more and more
consumers play games on their phones.
NaturalMotion is the biggest acquisition for the firm, and
it comes after Zynga bought OMGPOP for $180m in
2012, only to see that firm's flagship game, Draw
Something, shed users.
In June, the company announced it would cut 18% of its
workforce and then a month later, it was announced
that Mr Mattrick would take over from Zynga founder
Mark Pincus.
The $25m loss actually represents good news for
Zynga: it is 43% lower than the same period last year.
Investors cheered the news of the acquisition and the
cuts, sending Zynga's stock up in after hours trading.
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