
Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M - christophe971
http://techcrunch.com/2013/06/04/zynga-shuts-down-omgpop-one-year-after-acquiring-it-for-200m/
======
pyre

      | "but most of my team had new jobs lined up
      | by the time they left the building anyway."
    

I've never experienced this. Does this mean that they were already looking, or
that they were able to immediately call someone up and get a job offer on-
demand?

Edit: To be clear, having 'a job lined up' to me means that they already at
least have an offer, rather than just a bunch of emails from recruiters and/or
people looking to hire them. It seems really amazing to go from laid off to
"have a job offer" in an afternoon. I could definitely see laid-off-to-
interviews-lined-up in an afternoon though. Am I being too specific in my
reading of this?

~~~
jerhinesmith
If it's anything like San Francisco, once word spreads that a gaming company
is shuttering, there's pretty much a "land grab" from the other local
companies for talent.

~~~
sdoowpilihp
Especially at a company like Zynga, that at least as far as I know, had a
fairly rigorous interview process. It's a chance to get a pre-screened
engineer, possibly on the cheap.

~~~
therobot24
understandably a company would want to pay less for higher quality work, but
at the same time if the process was rigorous and assuming many tech recruiters
are also trying to poach the employees - i would think 'on the cheap' wouldn't
really apply given supply/demand here

~~~
superkamiguru
It is on the cheap in the sense that they wouldn't expect to screen such
people as much. It obviously isn't free, costs more than hiring from within,
but cheaper versus trying to gauge recent graduates and the like.

~~~
therobot24
ah yea, didn't think that all the way through

------
yesplorer
I was surprised to hear 3000 people were making those Zynga games. Doing what
exactly? Pls I'm genuinely curious.

These social games seems so lame to me that I can't think of any reason why
someone will even think of building a public company on top of it. You simply
cannot meet investors' quarterly demand when your success is built on being
"flavour of the month" business model.

I don't have anything wrong against Zynga or its founder and so I don't wish
them failure but this should have come as a common sense that they should have
stayed private and stayed lean (both in taking VC funding and the number of
employees)

~~~
chaz
They have a few dozen games of varying popularity. The bigger ones need a non-
stop flow of new content to be created. Zynga was very good at creating new
tasks and items constantly, so there was always something to do and something
new to collect. It requires new story lines, artwork, mechanics, localization,
and support. Many of the games don't overlap, so each game needs much of its
own team.

> You simply cannot meet investors' quarterly demand when your success is
> built on being "flavour of the month" business model

Sure you can -- just look at any company that's in the entertainment business.
All of their products, from pop songs to to supermodels to blockbuster movies,
have a limited shelf life and require hit after hit after hit in order to
sustain the business. They stay ahead of the curve by casting a wide net,
having a team that is good at selecting the hits, effectively bringing the
product to maturity (like producing an album or movie), and marketing the crap
out of it.

Zynga may have made many mistakes along the way and probably got too large to
quickly. But they not the first nor last company that got a couple of major
hits and were backed to produce more based on that record. Do it well, and you
have Pixar. Do it poorly, and you join the massive pile of overhyped one-hit
wonders.

~~~
CodeCube
I just had a funny vision of what their task management system might look
like. With managers planting work items, and having to harvest them when the
developers are done :P

~~~
mediascreen
Yes! Please Atlassian, consider this a feature request for Jira.

------
ianstallings
I bet all the execs got well paid for their terrible efforts though and they
will slide into new positions of power regardless of their merit. We need to
take our industry back from the leeches. The near-sighted execs with nothing
but paper accolades and networks of cronies.

~~~
der3k
Start your own company then and set an example instead of criticizing others.

Edit: Thanks for all the upvotes/support. To those who see this as legitimate
criticism, really? The OP elaborated on nothing - no constructive criticisms
were made. Instead, it just sounds like pure anger and naïveté on my end,
alluding to all entrepreneurs trying to make it/who have made it as "leeches"
and "near-sighted execs" that have "networks of cronies." Stay classy.

~~~
raheemm
If failure of such magnitude cannot be criticized, then what should be?

~~~
tlb
Not even trying.

Edit: no, that's too mean. But I like people who take risks, and I get
defensive when people snicker at failure from their armchairs of hindsight. We
should learn from failures, but not rush to say, "he failed, what an idiot!"

~~~
ianstallings
I'm curious how you know so much about me. How do you know what I've done?
I've already started my own companies bud and sold them, twice. I'm working on
my third now after just building a startup with some others called Brabble.
Here it is: <https://itunes.apple.com/us/app/brabble/id570281083?mt=8>

To the post below: BKRGB which was an signage platform and ShaiSoft, which
sold networking library software. The rest of the details are none of your
business sir. I like how you belittle me because my numbers aren't big enough
on the Brabble app. I've heard all this type of BS before. Don't listen to me
then. Just keep attacking other developers for trying.

BTW, we have a NASCAR running this on June 7th in the Party in the Poconos 400
with our logo on it. Keep an eye out for it. We're just starting.

~~~
IAmAI343
Since you brought it up, which companies are those? Otherwise It just seems
like you are making it up to make yourself look better.

By the way, I've also made iOs apps that barely get any ratings.

~~~
ianstallings
BKRGB which was a signage platform I built last year with a partner and sold
and ShaiSoft, which sold networking library software that I sold in 2002. I'm
not rich because of it but I _have_ tried and succeeded.

It's interesting how you belittle me because my numbers aren't big enough on
the Brabble app. If I had bigger numbers could I criticize then?

~~~
IAmAI343
>>It's interesting how you belittle me because my numbers aren't big enough on
the Brabble app.

Sorry about that. It was uncalled for. Honestly I thought you were just making
stuff up. You've certainly done more than most.

------
Fuzzwah
Could be good to hear from Dan Porter again.

[http://www.gamasutra.com/view/news/167244/Turning_down_Zynga...](http://www.gamasutra.com/view/news/167244/Turning_down_Zynga_Why_I_opted_out_of_the_210M_Omgpop_buy.php)

~~~
mherdeg
I didn't understand your reference. Is the story here that (1) Shay Pierce
wrote a column for Gamasutra about why he decided not to work for Zynga after
they acquired OMGPOP?

And then (I had to dig in the comments) (2) as that column was circulating,
OMGPOP CEO Dan Porter supposedly sent the Twitter message "What's so
interesting about success is the number of failures who try to ride on your
back. Shay Pierce is just one of many..."?

(The message was supposedly at
<https://twitter.com/#!/tfadp/status/185901564131688448> but this is a dead
link.)

What would you want to hear from Porter now?

~~~
mnglkhn2
It would be interesting to see if Dan Porter still considers OMGPOP a success
under Zynga?! That flippant tweet should have not happened, considering that
the sale was pretty much a very successful exit for Dan Porter but not
necessarily a great success for any of the OMGPOP people.

~~~
cwh
The sale was a success for all people at OMGPOP. Dan and all the board members
made sure of that. (this is not private knowledge)

~~~
smrtinsert
The business by contrast appears to have been a complete failure - but at
least they got paid?

------
pavs
I want to know what kind of thought process goes on company/individual's mind
when they decide to do an acquisition like this, for $200M, which doesn't make
enough money to justify it.

You would think when you are throwing around that kind of money, they would do
some rudimentary research?

How much money was omgpop making at the time of the acquisition?

~~~
samstave
The thought process was something like this:

MP: "FUCK! OMGPOP's drawsomething is the number one game! COPY IT!"

varucasalt.jpg

Legal: "Mark, uh - I don't think we can copy that one"

MP: "WHY?! - We've done it with everything else!"

Legal: "Yeah - but this one's too big, too successful. If we copy the number
one game, it would be too obvious."

MP: "How much to buy it? I WANT IT!"

/stamps foot

\---

I picture an internal battle around wanting to copy it and realizing that
there was no way to copy them without a PR nightmare - so they opted to
purchase them for an insane amount... even though that amount was not
reflective of their ability to maintain or succeed with future releases.

~~~
sdoowpilihp
Or the even simpler discussion:

"They have a huge hit, and no money in the bank. Let's acquire them now,
before they raise money, for relatively cheap, so we don't have to sink time
and resources into developing a clone ourselves."

Too bad it looks like this theory didn't pan out.

------
arindone
There are too many people commenting on Techcrunch that are almost rooting for
Zynga to fail and/or finding it amusing -- there are a still good number of
people working at Zynga (with families and livelihoods at stake) and I hope
they can right the ship and figure this out.

~~~
wpietri
I'm pretty mixed. I have friends working there, but I think Zynga is a blight
on humanity. I feel the same way about casinos and tobacco companies: they are
essentially exploitative. So I hope that their ships all sink, but that the
people working there get in lifeboats and land on some wholesome shore.

------
crimsonzagar
Is there anywhere a list of investors who called Zynga a "big deal" two-three
years earlier?

~~~
petercooper
We could just look at the investors who put significant sums in. Crunchbase
has a list: <http://www.crunchbase.com/company/zynga>

To be fair to them all, it reads like a who's who of the VC world from Brad
Feld and Reid Hoffman through to Andreessen Horowitz, Softbank, and Union
Square Ventures. I'm not sure any blame could be laid at their doors though,
it was an exciting and high growth company and that's exactly what they tend
to invest in (and what gets celebrated the most around here on HN.. growth >
profits, a "startup" isn't really a startup unless it's growing fast and all
that, etc.)

~~~
pekk
Which is exactly why this is an appropriate place for introspection and even
harsh criticism of what has happened. Two years ago people calling this event
would have been "haters" - and because of the difficulties of forecasting, it
was reasonable at least to say "we'll wait and see."

But now we've seen. The question is whether we will treat this as a freak
accident purely unique to Zynga, or learn something from it. First, though, we
need to allow that discussion rather than just saying "just make your own
company if you think Zynga was bad." Really?

------
samstave
I deleted DrawSomething from all my devices and we stopped playing it the day
OMGPOP was purchased by Zynga...

I vote with my appstore.

~~~
sdoowpilihp
More people stopped playing because they got bored. The fickleness of the
public is the real danger in games like these, not the idealism of a few
(which is a tragedy, as the latter would likely lead to much better games)

~~~
potatolicious
Is it really fickleness? Even hardcore games have a relatively short shelf-
life. The only real exceptions are games like WoW which have been able to
maintain some staying power.

For nearly everyone else all the money is made in the first few months after
which it disappears into the bargain bin. It seems like social gaming is no
different.

~~~
chipsy
Longer-term successes do occur(Minecraft, the Sims, League of Legends are some
of the biggest ones from the past decade or so) but the industry tends to
quietly ignore them because they don't fit well into established models and
formulas. The "blockbuster hit" model itself is a legacy of games being
intertwined with the early-adopter consumer tech business, and has lately been
challenged by an array of slower-growth stories that are essentially
community-oriented service businesses.

~~~
officemonkey
You're talking about the wrong gaming space. You're talking PC. On the mobile
side things are just as fickle (things go in and out of fashion,) but there
are mainstream long-term successes: "Angry Birds" being the first among them.

------
kin
Wow. I thought Zynga just shut down its other studios to focus on mobile. Now
they shut down one of their mobile studios?

~~~
chaz
OMGPOP was only about Draw Something, which faded as fast as it grew. Zynga's
mobile focus needs to be around making its most popular games more mobile, or
building new "mobile-first" games. Aside from Words with Friends, their most
popular games like Farmville have failed to get popular on mobile. Why not?
Mark Pincus would like to know, too.

------
smrtinsert
That developer who opted out is looking like a genius right now.

~~~
socialist_coder
not really. he lost out on severance.

~~~
blankenship
...but would’ve worked at Zynga for more than a year to get three months of
severance.

~~~
untog
Shrug, it's not like he wouldn't get paid for it.

I have no idea just _how_ miserable it would have been working at Zynga, but
working for a year in order to get three month's of severance doesn't sound
too awful to me.

~~~
socialist_coder
I worked at Zynga for a year + some months. It's actually a good place to
work. You learn a ton about social / viral games and monetization, make really
good contacts, get paid at or above market salary, eat really good food, and
get all the other startup perks. And, you're still doing game development so
it's not like your skills don't transfer.

I don't regret working there at all. I just wish the stock hadn't of tanked
and the game I was working on hadn't of been a failure =P

~~~
officemonkey
What successful game did you end up copying?

------
ianstallings
Zynga could possibly turn it all around if they achieve their goal of bringing
real-world currency to their gambling games in the US and on facebook. That is
a very tough road to navigate though given the current US climate regarding
gambling. Globally though it might be an option to rebuild the company.

------
mdm_
I never understood this acquisition in the first place. I was surprised to
learn that OMGPOP actually did produce more than one game[1], but I had
previously only heard of Draw Something, which my wife and her facebook chums
had already grown bored of by the time Zynga came knocking last year.

Forgive my naivety, but don't these things have to get past a board of
shareholders with a public company like Zynga? This isn't just a hindsight-
is-20/20 kind of thing; IIRC the general consensus at the time was that it was
a risky, ill-advised acquisition for a potential one-hit-wonder company.

[1]<https://en.wikipedia.org/wiki/List_of_games_on_Omgpop>

~~~
cwh
Not really sure what your point is here... are you questioning the initial
acquisition of OMGPOP by Zynga or what Zynga decided to do with OMGPOP after
the acquisition? The former has already been discussed at length and is a dead
horse. Now is the time to discuss the latter.

------
billpg
So that one who didn't want to move to the new employer was really the one
holding the company together!

~~~
sfaruque
Are you referencing this: <https://news.ycombinator.com/item?id=3760583>

------
SurfScore
Did any OMGPOP employees have stock options vesting still from the
acquisition, or was it all cash?

If they did have stock options, did they immediately vest upon termination or
did they lose them?

------
instaheat
It seems like a lot of their employees had the wool pulled over their eyes.

An acquaintance of mine who worked for Zynga up until a few days ago spoke
fondly of her position and the company's prospects. I issued her a warning
months ago. I think it just goes to show just because you have
kids/mortgage/bills, etc you should always evaluate who you are working for.

------
veritas20
Does anyone know the specific tax implications of a write-down of a bad
acquisition? In this case and in HP's case it's truly hard to believe that the
assets acquired are that severely depressed and I would like to know how this
affects taxpayers via reduced taxed obligations of the acquirer.

------
chris_wot
Makes Shay Pierce's decision look sane:

[http://www.gamasutra.com/view/news/167244/Turning_down_Zynga...](http://www.gamasutra.com/view/news/167244/Turning_down_Zynga_Why_I_opted_out_of_the_210M_Omgpop_buy.php)

------
tlogan
How big of $200M price tag for OMGPOP are bonuses and earn outs?

------
dylangs1030
The article just says OMGPOP is being shut down. Does that mean forward
development is ending, or apps like Draw Something will also be shuttered?

Does anyone know?

------
nish1500
How does laying off workers equate to shutting down a business. Am I missing
something?

------
jimmaswell
I guess I'll have to get to work on the Draw My Thing-type browser game I'd
been working on a while ago now if OMGPop's going. Me and some friends liked
that game a lot.

My implementation used javascript, php, and canvas, but I'm considering
learning ASP.NET by making this with it. Any thoughts?

------
CyberDroiD
Lots of drama about this! I guess that goes along with being high profile.

~~~
smrtinsert
I lost respect for them when they began blatantly duplicating the hard work
and ingenuity of indie developers just to make a few extra bucks. Why bother
thinking when someone else has done it for them?

I uninstalled all Zynga games and blocked all FB entries as soon as I found
out this was a common pattern for them. I also shared that knowledge with my
largely non-techie social network so they could see the kind of company they
were supporting.

------
ttrreeww
Congratulations to OMGPOP for pulling this Hudini act off :)

Cha-chin!

