Zynga acquires mobile games developer in all-cash deal
Zynga has bought Gram Games in an all-cash deal for $250 million. The mobile games developer will be eligible for a three-year earn-out as long as their team reaches the ‘profitability goals that align with Zynga’s long-term growth plans.”
Gram Games, which currently runs two development studios in London and Istanbul, found their success with the development of popular games such as 1010!, Six! and Merge Dragons! which made the top 50 Grossing Games chart in the US Apple App Store after its release last year.
Zynga CEO Frank Gibeau has stated that while Gram titles would grow Zynga’s audience by 3m mobile daily active users it didn’t expect any ‘significant’ revenue impact from Gram Games in Q2 as the expected extra bookings of $10 million will be classified as deferred revenue that will only be recognised in future quarters. He also predicted that Merge Dragons! would become a new ‘forever franchise’ alongside Zynga Poker and Farmville.
Gram Games co-founder Kaan Karamanci boasted that his company had ‘helped define the hyper-Casual genre’ and believed the union with Zynga’s live services expertise would help ‘grow our games and continue to delight millions of players around the world.’
The markets reacted positively to Zynga’s announcement, pushing the company’s share price to $4.56 in mid-Friday trading from $4.19 at Tuesday’s close.
The Gram Games deal is the latest in a string of Zynga acquisitions, including last year’s $100m deal for Peak Games and the $42.5m purchase of Harpan Solitaire. The Peak Games deal also included an Istanbul-based studio that Zynga has transformed into its Casual Cards team’s HQ.