Zynga adds another overwhelmingly popular app to its line up as Electronic Arts share prices drop by nine cents following the acquisition.
The video game industry deals in serious amounts of money and always has, at times dealing in more money than Hollywood and the music industry combined.
Activision, the publishing studio behind Call of Duty: Modern Warfare 3, recorded over $1-billion in revenue for the previous financial year.
Zynga is a publisher known for being the biggest player in the social gaming market with titles such as Farmville and Words with Friends just a few of the titles it has under its belt.
One development studio that has been doing serious business is OMGPOP studios. Their title, Draw Something, has been downloaded over 30 million times since its release five weeks ago. As a result it earned the attention of not only Zynga, but another publishing
giant as well.
Electronic Arts, which acquired PopCap studios last year in a multi-million dollar deal, was also rumoured to be interested.
However, Zynga has beaten everyone to the punch as they sealed a deal with OMGPOP worth an estimated $210-million. Out of that amount a total of $30-million will be paid towards employee-retention benefits.
Why spend so much money on a game development studio is a question one might ask. Well, to put things into perspective over 10.8-million users play the game daily. That is a total of 2.8-million more than can be seen on Zynga’s Words with Friends.
The acquisition has seen interest in Zynga’s shares rise and has led to a 33 cent increase in the company’s stock value. At the same time, the increase in demand for Zynga’s stock has resulted in EA’s own stock value dropping by nine cents.
It seems Zynga is intent on ensuring their dominance on social gaming as they now have another title that is sure to bring in a steady stream of revenue. It will be interesting to see how EA respond to such a move as they seem to have a lot of faith in PopCap
studios.
We will have more on the story as and when it happens.
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