Zynga has plans on jumping ship with OMGPOP. Apparently the mer4ger didnt go as planned and investors are also jumping ship. At its peak the ipo was worth $16 a share. Now the ipo is has dropped to $10 a share and falling..
Not surprisingly, investors are abandoning the company in droves. From an IPO price of $10, its shares hit a peak of almost $16 in March. As of Friday afternoon, investors were handing them out to homeless people on street corners instead of dimes. Just kidding—they were trading at $2.48.
What happened? Well, for one thing, the company’s roster of titles reminds me of an episode of the old TV series “Weird Science” in which the characters form a band, stumble on a hit single called “She’s Mean,” and then follow it up with rehashes like “She’s Angry,” “She’s Nasty,” and “She’s a More Or Less Unpleasant Person To Be Around.” Novelty hits, it turns out, aren’t something you can just churn out on command.
In an attempt to address this, Zynga in March bought OMGPOP, the New York-based studio behind the hit game “Draw Something,” for some $200 million. And, of course, it turned out that OMGPOP couldn’t recapture the magic either. CNET reports that Zynga has already written off $85-$90 million of OMGPop’s original value. To put that in perspective, TheNextWeb notes that Zynga’s OMGPOP loss pencils out to nearly $500,000 a day.
Copying other company’s games (allegedly) doesn’t seem to be working out so well either. Zynga is fending off a patent lawsuit from Electronic Arts over “The Ville,” which EA claims borrows too liberally from its own title, “The Sims Social.” (Zynga has countersued.)
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