Mark Pincus reveals Zynga nearly acquired Supercell for $400m in 2012

• Mark Pincus claims he had agreed a $400m deal to acquire Supercell in 2012.
• Zynga’s board rejected the acquisition after previous deals had struggled.
• “Hay Day was eating our lunch,” Pincus said.

Zynga founder Mark Pincus claimed the publisher had the chance to acquire Supercell for $400 million back in 2012, but his board rejected the deal after the company struggled with previous acquisitions. 

Speaking on the Deconstructor of Fun podcast, Pincus shared that he had a handshake agreement with Supercell CEO Ilkka Paananen to acquire the Finnish developer for $400 million in cash.

“I went to my board, and they were grumpy and they said, until you prove you can manage what you have, we don’t want you to buy anything else.”

Pincus said the board was reluctant at the time to approve another acquisition. Zynga had purchased Draw Something developer OMGPOP for $180m plus earnouts in 2013. The studio was shut down by September 2013.

Pincus notes, though, that the Supercell opportunity was very different. He said Zynga was already watching Supercell’s games closely.

“Hay Day was eating our lunch, and then they had Clash of Clans, which had just come out,” Pincus said. 

“We were all obsessed with their games and didn’t buy them.”

Supercell launched Hay Day and Clash of Clans in 2012, and both games quickly established themselves for the studio. The company generated $101 million in revenue from the two titles in 2012, before that figure jumped to $892 million in 2013.

Pincus said he followed this up with Zynga’s lawyer about whether he could use his voting control to force the acquisition through. According to Pincus, the lawyer explained that doing so would require him to remove the existing board and replace it with his own, while also exposing him to potential legal action. 

Looking back, Pincus said he wished he had been more willing to challenge the board. 

“I wish I had more conviction. I think I do today,” he said. “I wish I had more confidence as a founder and a CEO to go against the grain and fire my fucking board for being idiots.”

Instead, Pincus said he chose not to fight the board or Wall Street and went along with the decision.

He also discussed what happened at Zynga after he stepped away from the CEO role. Pincus said his successor later proposed acquiring another company for $550 million despite that business having “no revenues” or “no hit games”, and claimed the board thought that deal was great. 

Though he didn’t name the company, Zynga’s acquisition history includes NaturalMotion (whose Boss Alien studio had developed CSR Racing), which it bought for $527 million in 2014. 

A missed chance

Pincus later returned as CEO and said that Zynga had around $1 billion in foreign cash, but much of his focus was on fixing the existing business. 

He said he had to make painful cuts, improve Zynga’s games and establish what became its long-term franchise strategy. He also said the company spent around $800 million buying back its own stock. 

“It was a good move, I think in retrospect,” he said. “It was a good investment, but there were so many other good investments that I could have done at the time and didn’t because I was playing defense.” 

Pincus ultimately believes Zynga could have become a much bigger company. 

“It was a £12 billion company,” he said. “You know we had the chance to build the biggest game company in the world.” 

He also argued that the industry still lacks the ambition and innovation needed to create a Western games company at a massive scale

Pincus singled out Tencent while stating that there is still no Western games company with a market capitalisation above $100 billion. 

“I thought by now there would be five or six,” he said. “And there’s just no fucking vision in the industry, there’s no innovation, they're all just playing defense.”

Pincus stepped down as Zynga CEO for the final time in 2016, handing the reins over to Frank Gibeau before eventually leaving the company entirely after Take-Two’s acquisition of Zynga in 2022.

Pincus is now promoting his new book, Life at the Speed of Play, which explores his approach to product management and building companies.