Zynga buying 'Clumsy Ninja' maker, cutting staff

Published on NewsOK Modified: January 30, 2014 at 7:16 pm •  Published: January 30, 2014
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SAN FRANCISCO (AP) — Zynga Inc. said Thursday it is buying NaturalMotion, the company behind the hit mobile games "CSR Racing" and "Clumsy Ninja," while cutting 15 percent of its workforce in a turnaround effort.

The company moved up the release of its fourth-quarter earnings results by a full week to coincide with the announcement of the $527 million acquisition and the job cuts. Investors sent its shares up 63 cents, or 18 percent, to $4.19 in after-hours trading.

Zynga has been cutting jobs and posting losses as game players increasingly turn to smartphones and tablets. The company's biggest hits, including "FarmVille" and "Mafia Wars," have mostly been played on desktop and laptop computers. By buying NaturalMotion, it hopes to bolster its mobile games as its core business deteriorates.

King.com, the maker of the popular "Candy Crush Saga," has replaced Zynga as the No. 1 maker of games played on Facebook.

But the company said it plans to release "FarmVille" onto mobile devices in the second quarter, which it expects will help it reverse a long slide in audience and "bookings" — a precursor to revenue — at least for the remainder of the year.

"We anticipate that (the first quarter) will be the bottom," said CEO Don Mattrick in a conference call with investors. Mattrick left Microsoft's Xbox division last July to take over as Zynga ousted founder Mark Pincus.

NaturalMotion will give Zynga exclusive access to its groundbreaking game engine, called Euphoria, on mobile platforms. The engine is what powers the human-like motions of the character in "Clumsy Ninja," who can be hoisted, tickled and flung around with a few finger taps and swipes.

"It's a risky bet, but certainly they were in a position where they needed to be aggressive," said Benchmark analyst Mike Hickey. "Don is well respected by the Street so they're giving him the benefit of the doubt."