Zynga buys NaturalMotion for $527 million

Zynga buys NaturalMotion for $527 million
Seth Tipps

By Seth Tipps

January 31st 2014 at 6:38AM

Mobile game and tools developer is social publisher's biggest ever purchase

Zynga has acquired mobile game and technology developer NaturalMotion for $527 million.

NaturalMotion is best known to the industry for its game development tech, but it has also produced a number of hit games including CSR Racing and Clumsy Ninja.

This is the largest purchase in the the social gaming publisher's history, which reportedly shelled out another $310 million on acquisitions over three years including $210 million for Draw Something developer OMGPOP.

The company also announced cost saving measures that would slash 314 jobs – 15 per cent of the company's global workforce – with estimated savings of $34 million for 2014.

The news came during the company's earnings call for the fourth quarter of 2013, which reported a quarterly loss of $25 million and an annual loss of $37 million.

"Our acquisition of NaturalMotion will allow us to significantly expand our creative pipeline, accelerate our mobile growth and bring next generation technology and tools to Zynga that we believe will fast track our ability to deliver more hit games," said CEO Don Mattrick.

The $527 million cash and equity deal is the first major acquisition for the company since the former Xbox boss took over last year and, while it's tempting to say that Zynga is primarily interested in buying NaturalMotion's userbase, something has to be said for the tools picked up in the trade.

Zynga's biggest strength is widely accepted to be its back-end systems that analyse user behaviour, and this new deal could make the publisher a lot more attractive to third parties hoping to score some top-notch software support.

It also serves to boost one of Zynga's greatest weaknesses, mobile, both in terms of games and software.

Investors seem pretty pleased with the news, as shares shot up 18 per cent to $4.20 a share after hours, though it's unclear if the excitement is over the acquisition or the news of another round of cuts.

NaturalMotion employs some 260 workers in London, Brighton, Oxford, and San Francisco, and the deal will add CEO Torsten Reil and VP of games Barclay Deeming to the Zynga leadership.