Zynga (NASDAQ:ZNGA), the world’s largest social gaming company with more than 260 monthly million active users, has acquired California-based game maker A Bit Lucky Inc. for about $20-$25 million.  This move is to add titles to its social gaming platform which attracts serious gamers. A Bit Lucky has about 20 employees who will all join Zynga. It offers “mid-core” games which are more challenging and visually rich and help improve user engagement and attract gamers who are more willing to pay money for games and in-game merchandise and upgrades.
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Zynga has grown to become a top social casual gaming company, and this acquisition could help it broaden its offering beyond casual games. Serious gamers tend to spend more time on games and are more likely to buy upgrades and merchandise, leading to better monetization. Attracting this segment of gamers would require building games with higher user engagement and better graphics and this is where A Bit Lucky’s team comes in. The team is already working on “Solstice Arena” – a game designed for PCs and tablets.
Zynga acquired around 22 companies in 2010 and 2011 for nearly $150 million, and then topped it off by buying OMGPOP, the maker of Draw Something for $210 million, its biggest acquisition to date. We estimate Zynga’s new games to account a major portion of its revenues, going forward.
We have a $6 Trefis price estimate for Zynga, which stands nearly 120% above its current market price. New games account for almost 40% of its total value.Notes:
- Zynga Is Said to Pay Over $20 Million for A Bit Lucky, www.bloomberg.com, Sept 19 [↩]