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February 04 2014

YoVille Creator Seeks To Avoid The Game’s Death By Buying It Back From Zynga
yovilleZynga broke a lot of hearts when it announced it would be shutting down YoVille, a virtual world online game that’s been running since 2008. The game’s players have been building their simulated communities for many years now, but they only have until March to say goodbye. Unless, that is, YoVille’s original creator and his new game studio have their way. Big Viking Games, which is headquartered in Toronto and counts Albert Lai as its other co-founder, is looking to acquire the YoVille property from Zynga to help it avoid an early grave. That’s something the community definitely seems to support. Right after the announcement, a petition popped up from YoVillians threatening to boycott all Zynga titles if the closure went through (the Facebook group currently has over 15,000 members) and there have been some surprisingly emotional responses to the decision posted not only on Facebook, but to YouTube as well. There’s a good reason why Zynga was looking to shut down the property, however: It has only around 500,000 active users per month at this point, which is off tremendously from its roughly 20 million actives during its peak popularity. Zynga said that it made the decision based on a need to redirect time and energy to new games, rather than to maintaining some of its older ones. Still, Big Viking sees a lot of value left in the property. Lai explained to me in an interview that the company is in advanced talks with Zynga to take over the game. “YoVille’s a massive virtual world not unlike Second Life (but not “adult” in any way) that at its peak was one of Zynga’s top-3 money-makers, and far, far bigger than Second Life ever was in user base,” he said. “Mark Pincus is involved in getting it back to us at Big Viking.” Pincus of course is a Zynga co-founder, and was the company’s CEO from its inception until July 2013, when Microsoft exec Don Mattrick took over the role. Pincus remains at Zynga as Chairman of its Board of Directors, however, and as Chief Product Officer of the gaming company. His support isn’t the only sign that Zynga prefers this outcome: Lai says the company has been “amazingly good” throughout the purchase discussion process. “We’re in dialog with them right now and ironing out technical and legal issues,” he said about the state of negotiations. “We are hoping it

January 30 2014

Zynga Lays Off 314 Employees, Or 15% Of Its Workforce
zynga logoPaired with the news of a big half-billion-dollar acquisition, Zynga is also laying off about 15 percent of its workforce, or about 314 employees. This is part of a cost-reduction plan that is supposed to generate $33 million to $35 million in savings this year, excluding a $15 million to $17 million restructuring charge. In an interview today, CEO Don Mattrick said these jobs would mostly come out of “infrastructure” areas and wouldn’t involve shutting down any individual studios. Zynga has roughly 2,000 employees at a time when better-performing competitors lack anywhere near the same kind of headcount. Supercell, which sold half of itself for $1.53 billion last fall to Japanese carrier Softbank, currently has about 130 employees and was producing just shy of $200 million a quarter in revenue in the beginning of last year. Since Mattrick took over the company from founding CEO Mark Pincus, Zynga has engaged in a series of layoffs, cut out middle layers of management and shut down poorly performing games. Last summer, the company let go of about 520 people, or 18 percent of its workforce.

January 17 2014

Zynga Drops 12% In Regular Trading On External Warnings About Its Coming Earnings
Screen Shot 2014-01-16 at 5.24.19 PMSocial gaming firm Zynga today plunged 12 percent in regular trading, following a warning by Sterne Agee's Arvind Bhatia, which indicated that the market's fourth-quarter consensus may be too optimistic. Shares fell by 49 cents to end the day at $3.54.
Tags: Earnings TC Zynga

December 16 2013

Endemol Bets On Real-Money Gaming, Leads $13 Million Round In Social Casino Startup Plumbee
plumbee_home5Endemol, the Netherlands-based TV production house known for game shows like Fear Factor and Deal Or No Deal, is now making a bet on online gambling. The company today announced that it has made a strategic investment of $13 million in social casino startup Plumbee, as it plans to raise its digital profile by investing in online gambling and going beyond the traditional video production business. Founded by former Playfish executives, Raf Keustermans, Gerald Tan and Jodi Moran, Plumbee started in 2011, and has more than one million monthly active users. Prior to this, Plumbee had raised $2.8 million in funding. As part of the strategic investment, Endemol will be working with Plumbee to build on its existing digital gaming projects, according to chairman Lucas Church. “Social casino gaming is a fast emerging market and Plumbee is one of the most innovative and dynamic operators in this space. This new partnership will allow us to accelerate the growth of Endemol’s digital gaming business around the world, whilst capturing more of the value created by our entertainment brands,” Church said in a statement. The investment comes at a time when we have seen mixed fortunes both for social gaming companies and real-money gaming ventures. Zynga had high hopes for it, but earlier this year, after much lobbying, decided to drop its pursuit for a real-money gaming license in the U.S. Zynga, of course, hasn’t had the most stellar record of late in social gaming, either. But others like Supercell continue to bring in the punters in droves. Plumbee, with its Playfish heritage and new focus on a mix of free-to-play and real-money games, wants to tap into both areas. And now Endemol is hoping to cash in on that, too. Keustermans, the CEO of Plumbee adds: “Endemol will become a strategic shareholder and this will enable us to leverage the company’s international network and globally recognised brands. This will significantly boost the growth of our worldwide user base as we create gaming experiences that stand out from the competition.” So far, Endemol has been building its digital gaming business internally, mostly by launching gaming apps based on popular shows such as “Pointless” and “Deal Or No Deal”. And it is making other inroads into pure-play online content. In November, it announced a $40 million investment in Endemol Beyond, a new online video network. Endemol’s recent digital gaming projects include The Money Drop second

October 24 2013

Zynga's Shares Pop Nearly 12% On Lower-Than-Expected Losses
Zynga’s shares rose nearly 12 percent in after-hours trading on lower-than-estimated losses. Zynga posted a net loss of $68,000 on about $203 million of revenue, so they managed to stay roughly break-even. Their top line revenues are down 36 percent year-over-year as Zynga deals with disastrous losses in its user base on the Facebook platform. At the same time, they haven’t made as strong a transition to mobile gaming platforms as other com Daily active users are down to 30 million, or half of what they were a year ago. Monthly active users are similarly now less than half of what they were a year ago at 133 million. Today, they have just three of the top games on the Facebook platform by daily active users, a far cry from the days when they dominated the charts. Yet new CEO Don Mattrick argued to shareholders that he is making the changes necessary to return Zynga to its former glory. “We believe we are poised for future growth,” he said on the earnings call. “I am confident that Zynga is rewiring itself in a meaningful way that will strengthen the core of our business and put us back on track to achieve even more significant growth and progress.” Today, Mattrick just hired Clive Downie, from DeNA and previously Electronic Arts, to be its chief operating officer. Mattrick said in reorganizing Zynga, he’s flattened the management structure. Creative product leads now report directly to him. “Entertainment is an excellence business,” Mattrick said, adding that Zynga is aiming to build games “with the fit, finish and polish that truly engages a mass market audience.” In the last quarter, the company launched a number of new titles, including Fairy Tale Twist, Ninja Kingdom and Hit it Rich. In mobile games, they’ve launched 1 Word, which was with the KiK Messenger App, and CastleVille Legends. They also released New Scramble with Friends, Baseball Slam (3P), and CityVille KRE-O. While monthly payers declined to 1.6 million in the third quarter from 3 million the year before, the average bookings per daily active user rose to 5.5 cents from 4.7 cents. It also rose 4 percent on a quarterly basis. (That’s how much a daily active user spends on average on virtual transactions in Zynga’s games.) Zynga said that its revenue will decline even further in the fourth quarter to $175 million to $185 million — which is usually

August 05 2013

OMGPOP Team Tried To Buy Back Its Site, But Zynga Killed It Instead
OMGPOP almost got an extra life, but Zynga said 'game over'. Zynga just finalized plans to shut down OMGPOP, the game developer of Draw My Thing it acquired for $200 million in March 2012. But multiple sources familiar with Zynga tell TechCrunch the OMGPOP team was in direct contact with Zynga leadership in an attempt to buy back the site or continue operating it, yet Zynga refused.
Zynga To Shut Down OMGPOP's Online Gaming Portal,
Long before OMGPOP found its sudden (and rather fleeting) success as a mobile game developer with Draw Something, it began its life as an online game network at After Zynga acquired OMGPOP for around $200M only to lay off much of the team a year later, it was unclear what would happen to this last lingering monument to the company. On September 30th, it’ll be shut down for good. It’s the final period in OMGPOP’s story, a Zynga-branded version of Draw Something left as its only legacy. Zynga is quick to point out that players will still be able to play Draw Something (both the original and the sequel) and Draw My Thing (the game that inspired Draw Something. I mean, besides Pictionary.) after the main portal goes dark. Some games (Cupcake Corner, Gem Rush, Pool World Champ, and Snoops) are gettin’ the axe a bit earlier than the rest, dropping off the Internets at the end of August.
Tags: TC Zynga OMGPOP

July 30 2013

Zynga Sheds Three Top Execs As Its New CEO Shakes Up The Troubled Gaming Firm
In the last month, Zynga has quietly parted ways with three of its executive staff, early changes under the period of transition that the company's new CEO, Don Mattrick, is currently leading. Bloomberg first reported the departure of Nathan Etter, John Osvald and Jesse Janosov. TechCrunch confirmed their collective exit with a source familiar with the matter. Etter has already updated his LinkedIn page to reflect his new role as a vice president at Disney.
Tags: Gaming TC Zynga

July 25 2013

Zynga's New CEO Don Mattrick Says It Won't Be Quick Or Easy To Get The Company Back On Track
Don Mattrick, the new Zynga CEO announced at the beginning of the month, offered his initial on-the-job observations today during the conference call discussing the company's second quarter earnings. Mattrick (on the right of the photo with Zynga founder and former CEO Mark Pincus) started out by offering some positive commentary, saying that the company "caught lightning in a bottle" and "achieved in only a few years what most companies took a decade or more to do." However, he acknowledged, "We're missing out on platform growth that Apple, Google, and Facebook are seeing. In short, we can do better."
Zynga Won't Pursue Real-Money Gaming License In The U.S.; Shares Drop 13% In After-Hours
Zynga is giving up what many investors had hoped might be its trump card: a real-money gaming business in the U.S. The company, which has been testing out real-money casino games in the U.K. said it won’t be pursuing a U.S. license after all in its second quarter earnings report today. Sources tell us this is a decision to focus and not spread the company too thinly between real-money gaming, diversifying onto mobile and maintaining a core on Facebook. If it weren’t for the political and legal complexities of opening up real-money gaming in state after state, the business could have been interesting for Zynga, especially considering how long Zynga Poker has dominated both on the Facebook platform and on iOS and Android. None of Zynga’s social casino games, which use virtual currency, are affected by this. Shares declined 13 percent in after-hours to $3.02. In the release today, Zynga said: Zynga believes its biggest opportunity is to focus on free to play social games. While the Company continues to evaluate its real money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States. Zynga will continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings. Zynga has long been exploring real-money gaming. It partnered with operator Bwin.Party to offer titles in the U.K. Then last November, the company took its first steps toward real-money gaming in the U.S. by applying for a “preliminary finding of suitability” from the Nevada Gaming Control Board. It’s not that this option is forever off the table. It’s just that the company is in the middle of a significant platform transition now, and real-money games — which would probably only be available to players in Nevada at first anyways — could be distracting.

July 24 2013

John Doerr On Zynga Investment: “We Own 60M Shares, So I Want That Stock Back Above $10 … Where God Intended It”
Investors tend not to be cool, sexy or "famous" in the traditional sense. After all, anyone can invest in one great company, but reproducing those victories habitually over decades is nearly impossible. Thus, while investors may never become celebrities, a handful have managed to achieve a kind of renown by defying the odds and continuing to pick next year's winner. While his record is far from flawless, John Doerr is one of those investors, because -- as Google CEO Larry Page puts it -- he "sees the future first." A Kleiner Perkins partner since 1980, Doerr has backed companies like Symantec, Netscape, Sun Microsystems, Intuit, Amazon, Google and Twitter. Doerr has also gone on to become a big supporter, spokesman and evangelist for reform (and innovation) in education, health and greentech (among others). And, as he showed today at Fortune's Brainstorm Tech Conference in Aspen, the dude is eminently quotable no matter the subject -- success or failure.

July 03 2013

New Zynga CEO Mattrick's Package Is Worth About $50M In Stock, Options & Salary
New Zynga CEO Don Mattrick, who just left Microsoft to fix the ailing social gaming company, is getting incentivized heavily with stock for his new gig. He starts with a sign-on bonus of $5 million, a base salary of $1 million, then gets a pro-rated minimum annual bonus that is either worth 200 percent of his salary or the average bonus percentage for the rest of the company's executives -- whichever is greater.

June 03 2013

Zynga Prepares To Lay Off 20% Of Global Workforce, Zynga LA (And Likely More) To Close
It looks like Zynga is in the midst of laying off hundreds of employees. At the end of last week, we heard that the company would be laying off 20 percent of its worldwide staff today. A Zynga spokesperson declined to comment, but we've started to see updates on Twitter suggesting that the layoffs are, in fact, underway.

August 10 2012

One Horrifying Account Of Working At Zynga
Zynga Anonymous
Divorce, alcoholism, and near worthless stock are the rewards for 12 hour days prepping for a game launch at Zynga, according to one anonymous Quora user who worked there after their company was bought by the gaming giant. The answer was called "butthurt" by one responder. "Sorry you're not a millionaire after a year of work on a failed product" said another. Indeed it seems a bit overemotional and worth taking with a grain of salt. Long hours and rewards that might not materialize are part of working at startups. Still, the answer has received tons upvotes, including some from former Zynga employees, and sources from inside the company say they've seen these hardships first hand. So here's the grim Quora tale of killing yourself to get to an IPO, just to see your $10 shares dive to $3.

August 08 2012

Following Reorg That Stripped Him Of Responsibility, COO John Schappert Leaves Zynga
Zynga just announced that chief operating officer John Schappert is leaving the social gaming giant and its board of directors. "We can confirm that John Schappert has left Zynga and its Board of Directors effective immediately," said CEO Mark Pincus in a statement. "John has made significant contributions to the games industry  throughout his career and we appreciate all that he has done for Zynga. John leaves as a friend of the company and we wish him all the best.”

May 03 2012

Fly Or Die: Draw Something
Screen shot 2012-05-03 at 1.27.39 PM
Draw Something has been a hot topic of late. About a month ago, OMGPOP, the company behind the hit game, was acquired by Zynga as the web gaming company attempts the migration over to mobile. The $180 million deal took Zynga's daily user traffic up 25 percent, and even though Draw Something has been bleeding users, the motivation behind the acquisition circles back to Zynga's transition to mobile. They bought talent, instead of trying to mimic it. That, dear readers, is a Fly. But what about the game itself?

April 26 2012

Zynga CEO Mark Pincus: $180M OMGPOP Acquisition Was A “Rare Instance”
Stepping back from remarks a few weeks ago that suggested that Zynga was about to go on a shopping spree, Zynga chief executive Mark Pincus said the $180 million acquisition of Draw Something-maker OMGPOP was a "rare instance." Although OMGPOP was certainly a step up from anything Zynga has ever done before, Pincus said it didn't represent a change in strategy from last year. He said Zynga will continue to be "prudent and bottom line-oriented" in its decisions today during the first-quarter earnings call. That's a change in tone from an interview with Bloomberg a few weeks ago when he said that he expected to do "a few” OMGPOP-sized deals in the next three to five years. His remarks helped send shares tumbling 13.9 percent from the day the story appeared.
Zynga Beats Q1 Estimates With Revenues Of $321 Million As Mobile Usage Climbs To 21M Daily
Zynga's revenues rose 32 percent to $321 million in the first quarter, beating analysts' estimates of $316.8 million in revenue and earnings of 5 cents a share excluding stock-based expenses. Bookings* came in at a record $329 million, up 15 percent over the year before, and up 7 percent compared to the previous quarter -- meaning Zynga didn't see that seasonal decline in revenues that Facebook did. The company said revenue growth was driven by the launch of games like Hidden Chronicles and Castleville and its increasing footprint on mobile platforms. Overall, Zynga posted a net loss of $85.4 million, mostly because of stock-based expenses. Excluding those expenses of $133.9 million, Zynga would have had earnings per share of 6 cents or $47 million. That would be down 38 percent from the year before. The company also raised its annual guidance to $1.425 billion to $1.5 billion in bookings, up from $1.35 to $1.45 billion. Shares are down 1 percent in after-hours trading to $9.33.

April 23 2012

Zynga Contributed 15% of Facebook’s Revenue In Q1, Down From 19% A Year Ago
Zynga and Facebook are ever gradually trying to separate from each other. It's working -- sort of? Facebook said today that 15 percent of its revenue in the first quarter came from either advertising or payments tied to Zynga games.* That's down from 19 percent during the same time a year earlier. About 11 of the 15 percent in revenue was from the 30 percent revenue share Facebook takes from transactions in Zynga games on the platform or advertising that Zynga directly paid Facebook for. Another 4 percent comes from advertising shown alongside Zynga content.

April 19 2012

Update Your Draw Something App To Chat, Save Drawings, Share ‘Em To Facebook and Twitter
Draw Something Update Done
Tell your friends to hit the App Store or Android market, there's a new update for Draw Something out today with some cool new features. Now you can chat with friends while you play, save your drawings to your phone or tablet, and share those drawings straight to Facebook or Twitter. Zynga, who recently acquired Draw Something and its developer OMGPOP for over $180 million, hopes these social and viral improvements will restart growth as the app has started bleeding users over the last few weeks. Despite Zynga's notoriety for designing games to maximize addictiveness and the amount users spend, there's been no tweaks to Draw Something's virtual goods and uncompetitive style. Instead, former OMGPOP CEO and new Zynga Mobile New York General Manager Dan Porter told The Guardian the game was successful because "it's very chilled, very zen".
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