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Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M
- billpg 13y agoSo that one who didn't want to move to the new employer was really the one holding the company together!
- crimsonzagar 13y agoIs there anywhere a list of investors who called Zynga a "big deal" two-three years earlier?
- ilamont 13y agoValleywag put together the following list of luminaries who were hyping Zynga a few years ago(1): - Michael Arrington - Kleiner Perkins partner Bing Gordon - John Doerr - Fred Wilson The NYT ("Will Zynga Become the Google of Games?") and San Francisco Chronicle ("[Pincus] was indisputably farsighted in recognizing the opportunity") are also on the list. Sheryl Sandberg and Business Insider are named as well, but the quotes attributed to them don't seem to be in the same league. 1. http://valleywag.gawker.com/heres-everyone-who-hyped-zynga-before-it-shit-the-bed-511090658 http://valleywag.gawker.com/heres-everyone-who-hyped-zynga-b...
- lifeguard 13y agoI remember the hype.
- petercooper 13y agoWe could just look at the investors who put significant sums in. Crunchbase has a list: http://www.crunchbase.com/company/zynga http://www.crunchbase.com/company/zynga To be fair to them all, it reads like a who's who of the VC world from Brad Feld and Reid Hoffman through to Andreessen Horowitz, Softbank, and Union Square Ventures. I'm not sure any blame could be laid at their doors though, it was an exciting and high growth company and that's exactly what they tend to invest in (and what gets celebrated the most around here on HN.. growth > profits, a "startup" isn't really a startup unless it's growing fast and all that, etc.)
- pekk 13y agoWhich is exactly why this is an appropriate place for introspection and even harsh criticism of what has happened. Two years ago people calling this event would have been "haters" - and because of the difficulties of forecasting, it was reasonable at least to say "we'll wait and see." But now we've seen. The question is whether we will treat this as a freak accident purely unique to Zynga, or learn something from it. First, though, we need to allow that discussion rather than just saying "just make your own company if you think Zynga was bad." Really?
- sheri 13y agoA16Z gets touted as an order of magnitude smarter than the rest of the VC's out there, and my opinion of them has dropped after looking at their portfolio's recent performance. Yes, they have made lots of money, but that firm specifically was supposed to be about recognizing long term opportunities, and not just following growth and fads. Of course, its always easy to comment with the benefit of hindsight.
- aheilbut 13y agoThose investors were all very astute, and you can bet they were mostly out after the IPO.
- Fuzzwah 13y agoCould be good to hear from Dan Porter again. http://www.gamasutra.com/view/news/167244/Turning_down_Zynga_Why_I_opted_out_of_the_210M_Omgpop_buy.php http://www.gamasutra.com/view/news/167244/Turning_down_Zynga...
- mherdeg 13y agoI didn't understand your reference. Is the story here that (1) Shay Pierce wrote a column for Gamasutra about why he decided not to work for Zynga after they acquired OMGPOP? And then (I had to dig in the comments) (2) as that column was circulating, OMGPOP CEO Dan Porter supposedly sent the Twitter message "What's so interesting about success is the number of failures who try to ride on your back. Shay Pierce is just one of many..."? (The message was supposedly at https://twitter.com/#!/tfadp/status/185901564131688448 https://twitter.com/#!/tfadp/status/185901564131688448 but this is a dead link.) What would you want to hear from Porter now?
- mnglkhn2 13y agoIt would be interesting to see if Dan Porter still considers OMGPOP a success under Zynga?! That flippant tweet should have not happened, considering that the sale was pretty much a very successful exit for Dan Porter but not necessarily a great success for any of the OMGPOP people.
- cwh 13y agoThe sale was a success for all people at OMGPOP. Dan and all the board members made sure of that. (this is not private knowledge)
- smrtinsert 13y agoThe business by contrast appears to have been a complete failure - but at least they got paid?
- pyre 13y ago| "but most of my team had new jobs lined up | by the time they left the building anyway." I've never experienced this. Does this mean that they were already looking, or that they were able to immediately call someone up and get a job offer on-demand? Edit: To be clear, having 'a job lined up' to me means that they already at least have an offer, rather than just a bunch of emails from recruiters and/or people looking to hire them. It seems really amazing to go from laid off to "have a job offer" in an afternoon. I could definitely see laid-off-to-interviews-lined-up in an afternoon though. Am I being too specific in my reading of this?
- goofygrin 13y agoI got the axe at a job a few years ago at lunch on a Thursday. By 3pm I had a new gig lined up start the following Monday. Networking and contacts (and I mean legitimate networking) really play a big part in your overall success. I'm in a large city, but nothing like NYC or the Valley either.
- pyre 13y ago| I mean legitimate networking Are you trying to distinguish relationships vs. contacts/acquaintances here (i.e. "knowing people professionally" vs. "knowing people from going to a couple of meetups")?
- tomkarlo 13y agoProbably vs. LinkedIn and online, in particular.
- mindcrime 13y agoNetworking and contacts (and I mean legitimate networking) really play a big part in your overall success. Networking and relationship building is huge. I got laid off from my previous $DAYJOB back in Jan '12. I showed up at the office at ~9:30am, got called into my manager's office almost immediately, left by 10:00am, made 2 phone calls from my car on the way home... by ~3:00pm that afternoon I had a new job all but lined up (had to interview and everything as a formality, but the job was essentially offered already). Why? Because I take networking seriously, get to know a lot of people, participate in a lot of groups, do some public speaking, organize Meetups, etc., and more than a few people in my area know who I am and what my skills are. And I also knew exactly who was looking for the same reasons. So the 2 phone calls I made were extremely targeted, as I specifically knew those firms were looking to hire. Now it might not always work out that way, but I absolutely endorse the idea that networking is crucial.
- yesplorer 13y agoI was surprised to hear 3000 people were making those Zynga games. Doing what exactly? Pls I'm genuinely curious. These social games seems so lame to me that I can't think of any reason why someone will even think of building a public company on top of it. You simply cannot meet investors' quarterly demand when your success is built on being "flavour of the month" business model. I don't have anything wrong against Zynga or its founder and so I don't wish them failure but this should have come as a common sense that they should have stayed private and stayed lean (both in taking VC funding and the number of employees)
- Freestyler_3 13y agoI am curious too, they can't fix a game in 6 days when it breaks..... The games they deliver are full of bugs and inconveniences (ie. game with quests; each new quests is automatically accepted, and there is a limited amount of quests that can be open, and you cant cancel quests) This is not an entertainment company.
- sdoowpilihp 13y agoThe inconveniences are by design. The bugs are due to aggressive deadlines.
- Freestyler_3 13y agoWith 3000 people... that amazes me.
- sdoowpilihp 13y agoonly a percentage of those people are engineers working on the client facing component (i.e. the game). More over, people consistently underestimate the complexity of building games, including the PM's in charge of getting the game out the door.
- ownagefool 13y agoJust like 9 woman don't get you a baby in 1 month, having more devs won't get your games to market and bug free after certian diminishing returns. Too many cooks in the kitchen and all that.
- kin 13y agoWow. I thought Zynga just shut down its other studios to focus on mobile. Now they shut down one of their mobile studios?
- chaz 13y agoOMGPOP was only about Draw Something, which faded as fast as it grew. Zynga's mobile focus needs to be around making its most popular games more mobile, or building new "mobile-first" games. Aside from Words with Friends, their most popular games like Farmville have failed to get popular on mobile. Why not? Mark Pincus would like to know, too.
- mdm_ 13y agoI never understood this acquisition in the first place. I was surprised to learn that OMGPOP actually did produce more than one game[1], but I had previously only heard of Draw Something, which my wife and her facebook chums had already grown bored of by the time Zynga came knocking last year. Forgive my naivety, but don't these things have to get past a board of shareholders with a public company like Zynga? This isn't just a hindsight-is-20/20 kind of thing; IIRC the general consensus at the time was that it was a risky, ill-advised acquisition for a potential one-hit-wonder company. [1]https://en.wikipedia.org/wiki/List_of_games_on_Omgpop https://en.wikipedia.org/wiki/List_of_games_on_Omgpop
- cwh 13y agoNot really sure what your point is here... are you questioning the initial acquisition of OMGPOP by Zynga or what Zynga decided to do with OMGPOP after the acquisition? The former has already been discussed at length and is a dead horse. Now is the time to discuss the latter.
- pavs 13y agoI want to know what kind of thought process goes on company/individual's mind when they decide to do an acquisition like this, for $200M, which doesn't make enough money to justify it. You would think when you are throwing around that kind of money, they would do some rudimentary research? How much money was omgpop making at the time of the acquisition?
- pasbesoin 13y agoAt the risk of being (rather) trite, I would suggest that old saw, "Follow the money." Someone was incentivised (for lack of a real word) to make this happen. I would look toward short term incentives and/or compensation. Without getting into issues of culpability or "guilt", at a very basic level I can't help viewing the repeating series of these instances as simply being another form of "pump and dump". They keep happening, because someone (or, a certain kind/role of someone) is making money.
- mnglkhn2 13y agoZynga might have simply bought the userbase. Divide the paid $200mil to the number of users OMGPOP had at that time and then compare it to the amount you expect to gain per user once you have them consuming Zynga stuff. Of course, this thought is not always what actually happens, but Zynga might have been desperate already at the time for new distribution channels, that they agreed to pay a premium for that bundle of users.
- at-fates-hands 13y agoIt seems a lot of these companies don't perform proper due diligence. As someone who went through the first dot com bust, I would've thought many of these companies would know better - I guess not.
- freyr 13y agoHistory repeats itself. It seems like in tech, where things move fast, history repeats itself quickly.
- samstave 13y ago
- ianstallings 13y agoI bet all the execs got well paid for their terrible efforts though and they will slide into new positions of power regardless of their merit. We need to take our industry back from the leeches. The near-sighted execs with nothing but paper accolades and networks of cronies.
- der3k 13y agoStart your own company then and set an example instead of criticizing others. Edit: Thanks for all the upvotes/support. To those who see this as legitimate criticism, really? The OP elaborated on nothing - no constructive criticisms were made. Instead, it just sounds like pure anger and naïveté on my end, alluding to all entrepreneurs trying to make it/who have made it as "leeches" and "near-sighted execs" that have "networks of cronies." Stay classy.
- ksk 13y agoSo you need to start your own restaurant before complaining about food?
- tomovo 13y agoThe price, maybe. Food - not.
- crimsonzagar 13y agoCriticism is extremely important for any cos. and its executives. Criticism can potentially save any Zynga from sliding away to nothingness ...
- mseebach 13y agoIt very charitable to call the GP's rant "criticism".
- crimsonzagar 13y agoThat's correct. Which makes me wonder if rant = criticism + emotion? If yes, then he/she who rants does make good for an entrepreneur but only if that quality gets toned and put into action. I believe there would exist some analysis/research around this already. For there does seem some evidence of great companies been built by people who were hurt, emotional or egoistic about their shit.
- deleted 13y ago[deleted]
- smrtinsert 13y agoThat developer who opted out is looking like a genius right now.
- deleted 13y ago[deleted]
- socialist_coder 13y agonot really. he lost out on severance.
- jonknee 13y agoThe poor sap is probably stuck with keeping his new job. The horror!
- blankenship 13y ago...but would’ve worked at Zynga for more than a year to get three months of severance.
- untog 13y agoShrug, it's not like he wouldn't get paid for it. I have no idea just how miserable it would have been working at Zynga, but working for a year in order to get three month's of severance doesn't sound too awful to me.
- socialist_coder 13y agoI worked at Zynga for a year + some months. It's actually a good place to work. You learn a ton about social / viral games and monetization, make really good contacts, get paid at or above market salary, eat really good food, and get all the other startup perks. And, you're still doing game development so it's not like your skills don't transfer. I don't regret working there at all. I just wish the stock hadn't of tanked and the game I was working on hadn't of been a failure =P
- samstave 13y agoI deleted DrawSomething from all my devices and we stopped playing it the day OMGPOP was purchased by Zynga... I vote with my appstore.
- sdoowpilihp 13y agoMore people stopped playing because they got bored. The fickleness of the public is the real danger in games like these, not the idealism of a few (which is a tragedy, as the latter would likely lead to much better games)
- potatolicious 13y agoIs it really fickleness? Even hardcore games have a relatively short shelf-life. The only real exceptions are games like WoW which have been able to maintain some staying power. For nearly everyone else all the money is made in the first few months after which it disappears into the bargain bin. It seems like social gaming is no different.
- chipsy 13y agoLonger-term successes do occur(Minecraft, the Sims, League of Legends are some of the biggest ones from the past decade or so) but the industry tends to quietly ignore them because they don't fit well into established models and formulas. The "blockbuster hit" model itself is a legacy of games being intertwined with the early-adopter consumer tech business, and has lately been challenged by an array of slower-growth stories that are essentially community-oriented service businesses.
- officemonkey 13y agoYou're talking about the wrong gaming space. You're talking PC. On the mobile side things are just as fickle (things go in and out of fashion,) but there are mainstream long-term successes: "Angry Birds" being the first among them.
- apalmer 13y ago
- veritas20 13y agoDoes anyone know the specific tax implications of a write-down of a bad acquisition? In this case and in HP's case it's truly hard to believe that the assets acquired are that severely depressed and I would like to know how this affects taxpayers via reduced taxed obligations of the acquirer.
- tlogan 13y agoHow big of $200M price tag for OMGPOP are bonuses and earn outs?
- deleted 13y ago[deleted]
- arindone 13y agoThere are too many people commenting on Techcrunch that are almost rooting for Zynga to fail and/or finding it amusing -- there are a still good number of people working at Zynga (with families and livelihoods at stake) and I hope they can right the ship and figure this out.
- wpietri 13y agoI'm pretty mixed. I have friends working there, but I think Zynga is a blight on humanity. I feel the same way about casinos and tobacco companies: they are essentially exploitative. So I hope that their ships all sink, but that the people working there get in lifeboats and land on some wholesome shore.
- ttrreeww 13y agoCongratulations to OMGPOP for pulling this Hudini act off :) Cha-chin!
- deleted 13y ago[deleted]
- CyberDroiD 13y agoLots of drama about this! I guess that goes along with being high profile.
- smrtinsert 13y agoI lost respect for them when they began blatantly duplicating the hard work and ingenuity of indie developers just to make a few extra bucks. Why bother thinking when someone else has done it for them? I uninstalled all Zynga games and blocked all FB entries as soon as I found out this was a common pattern for them. I also shared that knowledge with my largely non-techie social network so they could see the kind of company they were supporting.
- ianstallings 13y agoZynga could possibly turn it all around if they achieve their goal of bringing real-world currency to their gambling games in the US and on facebook. That is a very tough road to navigate though given the current US climate regarding gambling. Globally though it might be an option to rebuild the company.
- instaheat 13y agoIt seems like a lot of their employees had the wool pulled over their eyes. An acquaintance of mine who worked for Zynga up until a few days ago spoke fondly of her position and the company's prospects. I issued her a warning months ago. I think it just goes to show just because you have kids/mortgage/bills, etc you should always evaluate who you are working for.
- SurfScore 13y agoDid any OMGPOP employees have stock options vesting still from the acquisition, or was it all cash? If they did have stock options, did they immediately vest upon termination or did they lose them?
- chris_wot 13y agoMakes Shay Pierce's decision look sane: http://www.gamasutra.com/view/news/167244/Turning_down_Zynga_Why_I_opted_out_of_the_210M_Omgpop_buy.php http://www.gamasutra.com/view/news/167244/Turning_down_Zynga...
- jimmaswell 13y agoI guess I'll have to get to work on the Draw My Thing-type browser game I'd been working on a while ago now if OMGPop's going. Me and some friends liked that game a lot. My implementation used javascript, php, and canvas, but I'm considering learning ASP.NET by making this with it. Any thoughts?
- dylangs1030 13y agoThe article just says OMGPOP is being shut down. Does that mean forward development is ending, or apps like Draw Something will also be shuttered? Does anyone know?
- nish1500 13y agoHow does laying off workers equate to shutting down a business. Am I missing something?