Following $53 million Newtoy acquisition, Zynga's mobile DAUs have risen 10-fold

Following $53 million Newtoy acquisition, Zynga's mobile DAUs have risen 10-fold
Continuing the flow of material from Zynga following the release of its pre-IPO S-1 form, the company has highlighted some of the issues surrounding its future mobile strategy.

"We believe there is a large opportunity to extend our brand and games to mobile platforms such as Apple iOS and Google Android," the company states in the Our Strategy section.

"We will continue to make our games accessible on a large number of mobile and other Internet-connected devices and invest in developing and acquiring mobile development talent, technologies and content."

Success with Friends

It particularly points to its deal with mobile developer Newtoy to demonstrate mobile's potential.

"Words with Friends is one of the leading social games franchises on mobile platforms," it notes.

Indeed, following the purchase of Newtoy for $53.3 million, $44.3 million cash and 1.4 million fully vested shares in December 2010, Zynga points out its daily active user total on mobile grew more than ten-fold from November 2010 to June 2011.

Part of this growth was driven as Zynga doubled Words with Friends' DAUs within four months following the acquisition.

And demonstrating the importance of mobile to Zynga, Newtoy has been revealed as its largest purchase. Zynga acquired six other companies in 2010 for a total of $48.4 million, while 2011 acquisitions, including GodFinger developer Wonderland, total $10.5 million to-date.

Cracked crystal ball

However, as is required in S-1 forms, Zynga also highlights its relative inexperience in mobile social gaming as something that could harm future growth.

"We have limited experience developing games for mobile platforms," it details.

"We expect to devote substantial resources to the development of our mobile games, and our limited experience makes it difficult to know whether we will succeed in developing such games that appeal to paying players or advertisers."

Other points highlighted include the risk that social Facebook games might not be relevant for mobile, as well potential obstacles in terms of integrating with mobile payment methods and mobile platform providers and getting carrier support.

Competitors including the likes of EA, DeNA, Gameloft, Glu Mobile, Rovio and Storm8 are also stressed.

"We expect new mobile game competitors to enter the market and existing competitors to allocate more resources to developer and market competing games and application," the form continues.

"These and other uncertainties make it difficult to know whether we will succeed in developing commercially viable games for mobile. If we do not succeed in doing so, our growth prospects will suffer."

[source: S-1]
Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.


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