Zynga Seems Happy With Its Acquisition Of OMGPOPBy: Zach Walton - May 24, 2012
If you think Facebook has had it tough over the past week, you should look at Zynga. The social games developer saw its share price plummet after a weak Facebook IPO. That wasn’t the beginning of their troubles, however, as the recently acquired “Draw Something” from OMGPOP has been bleeding users over the past few weeks. Some are beginning to question if the acquisition was such a good idea.
For their part, Zynga seems pretty happy with the acquisition. Even if “Draw Something” has lost almost half of its users with 5 million being lost in April, it’s still a big revenue stream for the company. Of course, that revenue seems to be more supported by ads than anything else.
It’s those ads, however, that may be driving users away. When Zynga announced a deal with major brands that would bring products into the game, users probably got out. I don’t know about you, but I don’t want to draw “Doritos” in a game that got popular for hilarious double-entendres. The acquisition by Zynga could have also played a hand in its reduced popularity since people may have seen the buyout as a sign of selling out.
Zynga certainly doesn’t think that way about the game as they call it an “evergreen franchise.” The hope is that it will remain popular for a long time to come. The game still has some 7 million daily active users. If they can keep those users on board, then it shouldn’t be a problem. To keep interest high, they have begun adding in social features.
The Wall Street Journal is reporting that Zynga is announcing more partnerships for Draw Something that should help keep popularity high. The most recent deal has Zynga partnering with Dreamworks Animation for its newest
stupid talking animals Madagascar film. The deal will not only see advertising for the film appearing in game, but task players to draw characters from the film.
WSJ also says that Zynga plans to expand “Draw Something” into a franchise of sorts. It’s the same thing that they did with Farmville when they released other titles with “Ville” in the title like Cityville and Frontierville. How will that work with Draw Something? We don’t know yet. Maybe they can make a game called “Draw This Particular Object” or “Draw Up A Check Payable To Zynga.”
Analysts are not as excited as Zynga is for the future of “Draw Something.” They feel that the Zynga’s attempt to grow and monetize the franchise is only going to devalue both the game and OMGPOP. I think it’s still too early to tell, but losing almost half of your users since the acquisition is a pretty big deal. Zynga is going to have to work hard to make “Draw Something” appealing to users again.