Ex-Zynga Employees Lament Bungled OMGPOP Acquisition

Was Zynga's $183 million acquisition of OMGPOP a complete flop?

Last week, in a company-wide email, Zynga CEO Mark Pincus initiated "Mandatory Meditation Mondays."

"I recently spent a great weekend with our senior leaders at a nearby Ashram," Pincus wrote in his message, which Zynga shared with Fast Company. "We spent the weekend doing yoga and meditation in addition to juice cleanses. We all found this incredibly grounding and left more mindful of what it takes to win this year. So, we have all agreed it will be a fun experiment to start having the entire company spend an hour every Monday in silent, joint meditation...Let's try this for the second quarter and see if we generate better metrics through mindfulness."

Pincus wasn't actually being serious--he was just setting up his staff for an April Fools' prank. But by the time "Meditation Mondays" started, Zynga's zen-like atmosphere had already dissipated, as the public soon learned that one of its top leaders would be leaving the company. In a statement released earlier this week, Zynga said VP Dan Porter, the head of the company's New York studio, had left the gaming company and would be replaced by another executive. Porter was the former CEO of OMGPOP, the startup behind the blockbuster hit Draw Something, which Zynga paid $183 million to acquire last March. It was Zynga's largest acquisition to date. Yet a year after purchasing the startup, Draw Something has proved a dud and Zynga continues to hemorrhage top talent. Was the acquisition a complete flop?

When Zynga bought OMGPOP, its userbase was rocketing. Draw Something, which enables users to competitively doodle pictures with friends, had tens of millions of downloads. But the game soon began losing popularity and sales waned, forcing Zynga to lower expectations about Draw Something and write off $95 million related to OMGPOP. "We all knew buying OMGPOP and Draw Something was bad timing," one top former employee told me recently. "They bought it at the peak [of Draw Something], and people got tired of the gameplay quickly and the usership dropped. We got the timing wrong."

"It wasn't a smart decision," says one former long-time product manager. "It was a knee-jerk reaction to something the executive team saw as a threat to the company. If you look at OMGPOP's portfolio of failed games, the fact that they hit on this winning game was an accident. People got bored of playing Draw Something after about two weeks. Zynga closed the acquisition and announced it when their numbers peaked. That's almost comical. They definitely overpaid."

But the acquisition was also about talent, some say. "I knew the OMGPOP guys--they were really talented, and really good at making games," says a former Zynga general manager. "What they were bad at was making money, and they were struggling for a long time."

"The guys over there [at OMGPOP] are really smart, and they did some really great stuff, but it wasn't enough to warrant the whole acquisition," says one former topflight designer. "The main reason they bought OMGPOP was because they had released something that was very cohesive and fresh, even though it was just Pictionary for a mobile audience. I was very disappointed by the acquisition because I didn't see where the monetization would be [with Draw Something]. By the time they made the acquisition, I had stopped playing it. I had to do 15 drawings at a time, and I couldn't catch up with it all since it would take like an hour and a half a day. It just felt encumbering, and I was worried that that type of gameplay would get tiring for the rest of the industry."

The bungled purchase of OMGPOP may signal larger problems with Zynga's acquisition strategy, some sources say. In years past, Zynga had gone on a shopping spree, snapping up a slew of small gaming studios that showed promise. But after its share price reached a high around the time of the OMGPOP acquisition in early 2012, Zynga's stock sunk roughly 75%, though its bounced back slightly in recent months. In the meantime, its laid off hundreds of employees and shuttered satellite offices. Some question whether the acqui-hire model is sustainable. The problem is, as the former top employee says, "We could not hire good mobile talent because most of the good mobile engineers and game designers were doing their own startups."

"The acqui-hire doesn't make sense, and I think Zynga's acquisitions are retarded, actually," says the former long-time product manager. "The cofounders who get hired in will stay for exactly how long it takes to vest in whatever exclusionary clause was in the acquisition. I think there are very few people who are still left who came through acqui-hires, with the exception of the Bettner brothers, who brought in the With Friends franchise, but almost everyone else has left." (As Zynga's stock continued to slide, Paul and David Bettner decided to leave Zynga, too, in October.)

"I wish that they would focus in on their own employees a little bit more, because people in there have great ideas," adds the former topflight designer. "It's just really hard to move something. It's like moving a boulder: You need a lot of people to do it, and if you try to do it by yourself, you'll just get squished."

Still, it's impossible to predict how the OMGPOP acquisition will pan out. Porter helped set the direction of Zynga's New York studio, which was focused on mobile games, and the company is gearing up for the release of Draw Something 2, a much anticipated sequel. As Zynga executive once said, "We think of it as a game that’s an evergreen franchise. It’s a game that will live on for years.”

"There's been a lot of acquisitions, and most of them have been a lot smaller than that one [of OMGPOP]," the former general manager says. "[Before], the biggest acquisition the company had made was NewToy, which [became] With Friends. People criticized Pincus then about it a lot, but it ended up probably being one of the best things to ever happen to the company. So, yeah, people talk about [OMGPOP's] decline. But I don't know in the big picture if it was a good or a bad acquisition."

[Image: Flickr user Michelle Tribe]

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2 Comments

  • Jessie James

     OMGPOP needs an overhaul on the rules on that site, They don't enforce the rules at all, you can report people for offensive pictures(porn,private parts exposed) and they do nothing about it. The chats are reported they say, really? as you can pretty much say the most offensive stuff on there and nothing happens. OMGPOP is filled with horny teens- old men and attention seeking girls and women. Thought it was a game site, not a place where people are just looking for cyber sex or cam, i shouldn't have to deal with getting bombarded with these people. I kick out 85% of the people i play on there, due to their sick thoughts.  If parents saw went on and actually did their jobs as parents OMGPOP would either be shut down or have about 75% less customers. 

  • jaronoff

    Draw Something when loading, actually steals the sound from whatever app is playing music, podcasts, etc. Considering that the core functionality is visual, and that sound plays NO PART in the interaction of said app, this is an absolute idiotic micro example of what's the problem with Zynga in general.

    Not focusing on making engaging games, and not listening to internal people, or outside users.... just the sound of their own apps.... and the people who refuse to tell it like it is.