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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

#101

Post by hendzen »

dkrich wrote: post #92
rwhitman wrote: post #84

Earlier quoted context omitted.

It seems like they are hedging against allowing the mega gaming companies (EA etc) from getting too much of a foothold in the mobile / social space.

But $200mm for a company that built the electronic version of Pictionary that was released six weeks ago? That is insane! The gaming industry is not one that can be controlled by a single company. I don't mean to sound harsh, but it is pretty clear to me that Zynga has too much money and very little vision. The numbers just don't make sense.

The network effects of Draw Something's user base add immense value. Think FB vs. G+. If Zynga had made their own Pictionary game, it would have been a graveyard.

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

#102

Post by hipsterelitist »

andrewhillman wrote: post #43

Another single founder success for YC. Obviously the entire team deserves credit. Kudos to all.

It actually wasn't single founder when YC funded them, Dan Albritton was the other founder. Really nice to work with them back in the day.

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

#103

Post by smackfu »

dkrich wrote: post #92
rwhitman wrote: post #84

Earlier quoted context omitted.

It seems like they are hedging against allowing the mega gaming companies (EA etc) from getting too much of a foothold in the mobile / social space.

But $200mm for a company that built the electronic version of Pictionary that was released six weeks ago? That is insane! The gaming industry is not one that can be controlled by a single company. I don't mean to sound harsh, but it is pretty clear to me that Zynga has too much money and very little vision. The numbers just don't make sense.

You say "electronic version of Pictionary that was released six weeks ago." I say "#1 paid, free, and top grossing iOS app, 12 million active users"."

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

#104

Post by dkrich »

hendzen wrote: post #101
dkrich wrote: post #92

Earlier quoted context omitted.

But $200mm for a company that built the electronic version of Pictionary that was released six weeks ago? That is insane! The gaming industry is not one that can be controlled by a single company. I don't mean to sound harsh, but it is pretty clear to me that Zynga has too much money and very little vision. The numbers just don't make sense.

The network effects of Draw Something's user base add immense value. Think FB vs. G+. If Zynga had made their own Pictionary game, it would have been a graveyard.

I'm not disputing that it is a wildly successful game. I am stating that a $200mm valuation of a single game is insane. I know the argument will be made that they bought the whole company, but this acquisition would not have happened if not for Draw Something.

Given the number of developers working on producing the next big hit in games, there will be a Words With Friends or Draw Something released on an ongoing basis. Why would Zynga get in the business of buying up these companies after the hits have been produced? Seems like a losing business model.

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

#105

Post by dkrich »

smackfu wrote: post #103
dkrich wrote: post #92

Earlier quoted context omitted.

But $200mm for a company that built the electronic version of Pictionary that was released six weeks ago? That is insane! The gaming industry is not one that can be controlled by a single company. I don't mean to sound harsh, but it is pretty clear to me that Zynga has too much money and very little vision. The numbers just don't make sense.

You say "electronic version of Pictionary that was released six weeks ago." I say "#1 paid, free, and top grossing iOS app, 12 million active users"."

Great. Would you pay $200mm for a game that was released a little over a month ago? It seems to me that money has no value in Silicon Valley. We've seen this story play out before, but I guess we'll need another bubble to clean out the rest of the suckers.

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

#106

Post by joering2 »

pduan wrote: post #94
zinssmeister wrote: post #14

Draw Something is everywhere and it's an awesome game. Good move for OMGPOP to cash out. It's a lot of money to throw at a studio that has basically only produced one hit game. Or maybe I am too old to recognize any of their other games ;)

It is a lot of money in aggregate. But when you break it down, it looks like a pretty good deal. Revenue multiple: Based on the reported figure of $250,000/day = $91.25M/year. At a purchase of $210M, this represents a multiple of 2.2x, far below the price/sales multiple of Zynga and Glu Mobile, two publicly traded companies on the US exchange. Sure, OMGPOP probably won't be hitting $250,000/day for the entire year bu…

how Zynga is going to make money (advertising on DAUs) off the users that ALREADY PAID for the no-ads Draw Something app?

$250k/day with $0.99 per user == ~252,000 installs a day. That's almost 92MM installs per year. How many active users does App store have?

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

#107

Post by the_mat »

ChrisNorstrom wrote: post #95
joejohnson wrote: post #67

Earlier quoted context omitted.

Why do you think Zynga is a despicable company?

lol, because Zynga stole nearly all of their game ideas from other poeple. Graphics and all. http://www.businessinsider.com/how-zynga-is-just-like-micros... Don't forget Tiny Tower http://www.forbes.com/sites/insertcoin/2012/01/25/everything... If Mark Pincus was more open about it and said "We're better marketers, business builders, and job creators than the original game creators. Yeah we copy their games, we might…

Well, let's be fair. OMGPOP is hardly a bastion of game design originality. For example, dinglepop is a 100% complete rip-off of Puzzle Bobble / Bust a Move, which Taito released in 1994. There have been countless clones since then, and there's nothing distinguishing dinglepop from any of them.

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

#108

Post by k33n »

ThePinion wrote: post #97

Well this sucks. I just got into Draw Something yesterday and have been a fan of OMGPOP since Iminlikewithyou (hipster), but a company like Zynga does not deserve this game, or my attention to it. Zynga is well known for being theives and gathering as much possible data as they can about their users to sell off to ad companies and such. Looks like I'll be uninstalling this Draw Something once the switch takes place.

Iminlikewithyou was way ahead of its time and I'll always remember it as the site that made me realize rich real-time user interaction was possible on the Web.

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

#109

Post by demoo »

joering2 wrote: post #106
pduan wrote: post #94

Earlier quoted context omitted.

It is a lot of money in aggregate. But when you break it down, it looks like a pretty good deal. Revenue multiple: Based on the reported figure of $250,000/day = $91.25M/year. At a purchase of $210M, this represents a multiple of 2.2x, far below the price/sales multiple of Zynga and Glu Mobile, two publicly traded companies on the US exchange. Sure, OMGPOP probably won't be hitting $250,000/day for the entire year bu…

how Zynga is going to make money (advertising on DAUs) off the users that ALREADY PAID for the no-ads Draw Something app? $250k/day with $0.99 per user == ~252,000 installs a day. That's almost 92MM installs per year. How many active users does App store have?

There will be plenty of places to cross promote their games. I'm thinking loading screens, contacts database,..

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

#110

Post by bobbles »

furyofantares wrote: post #86
samstave wrote: post #50

Earlier quoted context omitted.

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…

I hate Zynga games because of how buggy and slow they are. But it's not like Zynga doesn't add value. The examples I've seen of Zynga copying the base of other games also have them making significant adaptations to better fit the market. Zynga really understands the market a lot better than many of the little guys, and they add lots of value to lots of users that way. I'm curious if there are counterexamples.

This is really disappointing for me.. (well.. from a games on my phone perspective)

I used to really like Words with Friends. Then zynga did an app update where the icon was more about the zynga logo than the Words with Friends logo. (reverted after user backlash) Then it was more and more 'buy our other games!' notifications. Then the facebook integration slowed the app down so much it took 3-4x as long to actually play the game.

Yesterday I was saying to myself. Draw Something is so much better than Words with Friends, because it doesnt throw ANY of the zynga shit at me.

Now I wake up and see this on HN... so upsetting.

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