Zynga has invested $527 million in a buyout of Clumsy Ninja and CSR Racing maker – UK-based mobile game maker NaturalMotion – even as it lays off one in seven of its employees. The company made the announcement during the release its most recent earning report. The NaturalMotion buyout is the biggest acquisition by Zynga to date, beating out its $200 million purchase of Draw Something maker OMGPOP in 2012. And the company still has roughly $1.2 billion in cash built up from its Farmville and Cityville days.
"We believe that bringing Zynga and NaturalMotion together is the right step at the right time," Zynga CEO Don Mattrick said 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."
Even as Zynga buys NaturalMotion, bringing its 260 employees into the fold, it is instituting what it calls a "global workforce reduction" that will eliminate 314 employees, or roughly 15 percent of the company's workforce. The company says that these layoffs will generate "approximately $33 to $35 million in pre-tax savings for 2014" and leave Zynga with nearly 1,800 employees before the NaturalMotion buyout is taken into account.
For fiscal 2013 Zynga's revenues were down nearly 32 percent from the same period a year ago to $873 million. The company recorded a loss of $37 million for the year, a reduction from 2012's $209 million loss.
Monthly active users numbers were down 16 percent in the fourth quarter of 2013. The good news is that those players are paying 10 percent more on average than they had the previous quarter, cancelling out (for the most part) the raw player losses.
Source: Ars Technica