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Looks Like Zynga Just Bought OMGPOP For $200 Million

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Re: Looks Like Zynga Just Bought OMGPOP For $200 Million

#41

Post by pclark »

wilfra wrote: post #37

"it has recently been netting around $250,000 a day from the game — that’s after Apple takes its 30 percent cut." $7.5 million a month at the very beginning of their hockey stick growth, and they are willing to sell for $200 million? Deal of the century for Zynga... They should have leveraged this into a massive funding round and started making acquisitions, growing etc. Nobody is ever going to compete with Zynga if…

A cowardly decision? Do you have any idea how stressful it is running a team of 30 employees and tens of millions of dollars in financing and not having a clear path to turn it into a successful company? OMGPOP made great video games for 5 years and none of them stuck. They deserve recognition for sticking to their vision and eventually finding one that is a hit, I can totally imagine why the team wants to sell and not have to worry about the next hit.

It took OMGPOP over 5 years of concentrated efforts to succeed. http://en.wikipedia.org/wiki/List_of_games_on_Omgpop

Stop being so unbelievably rude.

Re: Looks Like Zynga Just Bought OMGPOP For $200 Million

#42

Post by jpdoctor »

paul wrote: post #28
j_baker wrote: post #18

Here's more detail on the price: $180 million plus another $30 million or so in employee retention payments, Im told. Is this typical? It would seem that the employees are getting the shorter end of the stick on this deal.

Not commenting on this particular situation, but to answer your question in general: If a company has an IPO, there are no "employee retention payments", so it's better than that :) Employee retention payments are actually a way to give employees a somewhat better deal than investors, though typically they will be subject to vesting.

> If a company has an IPO, there are no "employee retention payments", so it's better than that :)

The reverse split of common before preferred share conversions for IPO are often a big screw to the employees. Many are also unaware of it, as they don't dig through the S-1. (Atheros was the largest one I saw in this camp.)

Re: Looks Like Zynga Just Bought OMGPOP For $200 Million

#44

Post by jpdoctor »

paul wrote: post #32
jpdoctor wrote: post #22

Earlier quoted context omitted.

> Is this typical? It would seem that the employees are getting the shorter end of the stick on this deal. Which deals do you think they get the long end of the stick?

Talent acquisitions. Investors are often left with close to nothing.

True enough, but usually a talent acquisition means a failed product, which implies that the total stick length is pretty short anyway.

Re: Looks Like Zynga Just Bought OMGPOP For $200 Million

#45

Post by jpdoctor »

padobson wrote: post #33

I'm dying to know the cash/stock split on this one. It will send signals about what a company like OMGPOP thinks of the social gaming space going forward. Considering they just spent 6 years working in the sector, what they think of Zynga's future is telling.

> I'm dying to know the cash/stock split on this one. It will send signals about what a company like OMGPOP thinks of the social gaming space going forward.

It also signals whether znga thinks its stock is overvalued or undervalued.

Re: Looks Like Zynga Just Bought OMGPOP For $200 Million

#46

Post by wilfra »

jedc wrote: post #30

That rivals the Heroku for the biggest YC exit so far! (Heroku was ~$212million) OMGPOP would slot in at #2. https://docs.google.com/spreadsheet/ccc?key=0AkkhSN3vaY4jdF9... This likely means YC gets about $3-5million out of the deal, funding even more startups in the future. :) (edit: Originally wrote Flightcaster for some reason; meant Heroku. Was thinking of Flightcaster earlier today and got confused.)

So many great companies and so many early exits. Great for the VC's and angels - bad for the founders and early employees. And the users. Imagine if Heroku, reddit and others had stayed independent.

Facebook got this part right. Reject buyout offers and use them to raise capital at ever increasing obscene valuations - and build your product exactly as you want.

Re: Looks Like Zynga Just Bought OMGPOP For $200 Million

#47

Post by lazerwalker »

Given that Draw Something fits within the same asynchronous turn-based model of the With Friends games (owned, of course, by Zynga), I'm curious to see where Zynga moves with branding. There's something to be said for unifying all future OMGPOP/With Friends games under the With Friends blanket for cross-promotional purposes, but the "X Something" brand does have some measure of brand appeal.

Re: Looks Like Zynga Just Bought OMGPOP For $200 Million

#48

Post by k-mcgrady »

lazerwalker wrote: post #47

Given that Draw Something fits within the same asynchronous turn-based model of the With Friends games (owned, of course, by Zynga), I'm curious to see where Zynga moves with branding. There's something to be said for unifying all future OMGPOP/With Friends games under the With Friends blanket for cross-promotional purposes, but the "X Something" brand does have some measure of brand appeal.

I would guess they will probably go with 'Draw Something With Friends'.

Re: Looks Like Zynga Just Bought OMGPOP For $200 Million

#49

Post by ootachi »

wilfra wrote: post #46
jedc wrote: post #30

That rivals the Heroku for the biggest YC exit so far! (Heroku was ~$212million) OMGPOP would slot in at #2. https://docs.google.com/spreadsheet/ccc?key=0AkkhSN3vaY4jdF9... This likely means YC gets about $3-5million out of the deal, funding even more startups in the future. :) (edit: Originally wrote Flightcaster for some reason; meant Heroku. Was thinking of Flightcaster earlier today and got confused.)

So many great companies and so many early exits. Great for the VC's and angels - bad for the founders and early employees. And the users. Imagine if Heroku, reddit and others had stayed independent. Facebook got this part right. Reject buyout offers and use them to raise capital at ever increasing obscene valuations - and build your product exactly as you want.

Founders often don't have a choice as to whether to accept buyout offers. In the case of OMGPOP, which had received a ton of VC funding and struggled for years until finally finding some success, I can definitely see why VCs would want to force a sale. (In fact, I wouldn't be surprised if VCs generally think that "make games for iOS" is not a business model that is capable of the kind of returns they need anymore, and they want to avoid taking further risk on that model—hence they forced the sale.)

Re: Looks Like Zynga Just Bought OMGPOP For $200 Million

#50

Post by samstave »

untog wrote: post #10

Kind of sad. I mean, congratulations to OMGPOP, but I'd really like to see a decent competitor to Zynga out there. Their games are slow, buggy and overly instrusive, but no other company has the kind of traction they do. OMGPOP could have taken the hard route and built themselves up from the success of Draw Something. Oh well.

Really sad actually.

The only reason why Zynga bought them is because Draw Something is so high profile, that there was no way Zynga could steal it.

As I said over on Quora, this really sucks as Zynga is a despicable company.

Surely, the folks at OMGPOP had been worried that Zynga would try to steal this game, as they have done every one else -- and I would be interested to know what they thought of Pincus' character prior to the purchase.

At least they get to stay in NYC and be no place close to Pincus.

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