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   Technology StocksZynga, Inc.

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From: Glenn Petersen5/5/2016 10:02:04 AM
   of 358
Zynga's Q1 results tops forecasts

Brett Molina
9:36 a.m. EDT May 5, 2016

A bicyclist rides by Zynga headquarters in San Francisco.(Photo: Justin Sullivan, Getty Images)

Zynga topped Wall Street forecasts Wednesday with its first-quarter financial results, the first under new CEO Frank Gibeau.

The San Francisco-based maker of FarmVille and other titles reported sales of $187 million, beating forecasts of $171.85 million, according to analysts polled by S&P Global Market Intelligence. Earnings were break-even, besting projections of a loss of a penny per share.

First-quarter bookings, the money spent on games by consumers, reached $182 million, up 8% from a year ago.

News of the financial results sent Zynga shares surging 11.5% to $2.57 in Thursday trading.

"There are so many things we could focus our attention on and do better that I think will lead us to better results over the long term," Gibeau, who replaced Zynga founder Mark Pincus as CEO in March, said in an interview. (Pincus remains Zynga's chairman.)

Although the company cut costs and recorded a rise in advertising revenue, it projected a $20 million to $26 million loss for its current quarter.

Previously, Pincus stepped down as CEO and brought in Xbox veteran Don Mattrick to jump-start Zynga's push into mobile gaming. Indeed, during the first quarter, 76% of Zynga's overall bookings were generated from mobile, a 31% jump compared to last year.

"We believe that Zynga has an opportunity to create new social experiences to connect even more players together," Gibeau said.

Follow Brett Molina on Twitter: @brettmolina23.

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From: Glenn Petersen8/4/2016 6:50:05 PM
   of 358
Zynga User Base Shrinks Further, Loss Narrows on Accounting Change

Quarterly improvement driven by lower expenses

By Lisa Beilfuss
The Wall Street Journal
Updated Aug. 4, 2016 4:37 p.m. ET

Videogame developer Zynga Inc. ZNGA 0.34 % ’s second-quarter loss narrowed despite a shrinking user base and revenue decline, thanks mostly to an accounting change.

Zynga said its loss would widen in the current quarter, with revenue coming in below expectations. Shares dropped 8.1% in after hours trading.

The San Francisco company, known for its social games Farmville and Words with Friends, has been trying to steady its business. Zynga had a meteoric rise, thanks largely to a marketing relationship with Facebook FB 1.51 % in its early days, but since the company went public in late 2011 the stock has tumbled. Shares made their debut at $11 and most recently closed at less than $3.

The company has been trying to shore up cash, announcing layoffs last year that brought its staff to about half its peak and this year saying it would sell its seven-story San Francisco headquarters. It has also worked to cut marketing costs.

“We have more work to do in our turnaround,” said Chief Executive Frank Gibeau, though he expressed optimism over steps the company has taken to “do more with less.”

The second-quarter improvement was driven by lower expenses, primarily because of a benefit stemming from a change in the estimated fair value of recent acquisition’s liability. Zynga bought the social casino Rising Tide Games last year. Mr. Gibeau said lower marketing costs also helped. Such expenses declined 1.2%.

During the quarter, Zynga’s user base continued to shrink. The company reported 61 million average monthly users—down 26% from a year earlier and 11% from the first quarter. Most of those users play Zynga’s games on mobile devices. Average monthly mobile users dropped 23% year-over-year and 11% from the first quarter. Users who play daily fell 15% from last year’s quarter to 18 million.

As the company’s user base declined, so did revenue. Total sales slid 9.1% to 181.7 million, with online game revenue down 16%. Advertising jumped 22% from a year earlier, though from the first quarter it fell 8%.

Zynga’s loss narrowed to $4.45 million, or a penny a share, compared with a year-earlier loss of $26.9 million, or 3 cents a share. Excluding stock-based expense and acquisition-related costs, among other items, the company broke even on a per-share basis after posting a loss of 2 cents a share last year.

Analysts projected a loss of 2 cents a share and revenue of $169.8 million, according to Thomson Reuters.

For the current quarter, Zynga said it expects to report a loss of 3 cents to 4 cents a share. On an adjusted basis, the company sees a profit of a penny per share, matching analysts’ expectation. Zynga predicted third-quarter sales of $170 million to $180 million, short of the $187.2 million average analyst estimate.

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From: Glenn Petersen9/6/2017 7:03:54 AM
   of 358
Mostly OT to Zynga:

An Angry Birds Empire: Games, Toys, Movies and Now an I.P.O.

New York Times
SEPT. 5, 2017

Rovio Entertainment’s “Angry Birds” game has led to a series of sequels, a line of toys and clothing, and a feature film. Credit Columbia Pictures

LONDON — The digital world is littered with one-hit wonders — companies that tried to turn a single successful brand into a big-time business only to be eclipsed by changing technology and consumer tastes.

Zynga, which once paraded sheep in Times Square to celebrate a spinoff of its highly addictive FarmVille, is worth far less than it was when it went public in 2011. King Digital Entertainment tried to build an entire Candy Crush empire, but sold out to a traditional game maker two years ago.

The maker of Angry Birds, Rovio Entertainment, hopes to defy that trend.

Rovio found success in a smartphone game that pitted a brightly colored feathered flock against an army of green pigs, spawning a series of sequels, a line of toys and clothing, and a feature film. Now, the Finnish company is planning an initial public offering that could value the company at roughly $2 billion, in a test of whether investors will find favor in a single franchise and whether the business can evolve.

Rovio helped usher in the rise of smartphone games, building a juggernaut around the Angry Birds brand. In the game, released in 2009, users fling birds at elaborate structures built by pigs that have stolen their eggs.

The game’s idiosyncratic concept now has several spinoffs that rank among the most downloaded apps on smartphones and tablets. Rovio’s titles have been downloaded 3.7 billion times, the company said.

“The Angry Birds Movie” grossed around $350 million worldwide. A sequel is planned for release in September 2019.

Rovio has ridden the wave of a rapidly expanding mobile gaming market. The industry’s worldwide revenue was about $16 billion in 2012 and is forecast to top more than $50 billion this year, according to data from SuperData Research, a data provider on the games industry.

But Rovio now needs to prove it can profit beyond the success of Angry Birds. Its games business, which includes the original Angry Birds and more than a dozen spinoff titles, accounted for 79 percent of its revenue in the 12 months through June.

“They need to find a way to diversify their brand portfolio in the future,” said Atte Riikola, a research analyst at Inderes in Helsinki, Finland. “They have had problems in their history when trying to diversify, so it won’t be an easy task to do.”

The company has done a good job creating offshoots of its flagship game, like Bad Piggies and Angry Birds Match. The company has also introduced several non-Angry Birds titles in recent years, including a puzzle game called Fruit Nibblers and a game tied to the pop singer Shakira.

“The hardest part in the app market is to find the users, to get people to download your game,” said Tero Kuittinen, chief strategist at Kuuhubb, a Finnish company focused on lifestyle and mobile video game applications. “If you have a well-known intellectual property — you have something that is instantly recognizable, James Bond, ‘The Wizard of Oz,’ any kind of property like that — it helps you a lot. Why wouldn’t they leverage Angry Birds?”

But it is still unclear whether Rovio has the framework or model to fuel innovation and expand beyond its main brand. The mobile gaming environment is especially competitive.

“At a certain stage, you will need a formula for more efficient innovation success,” said Mark DiMassimo, the chief executive and chief creative officer at the advertising agency DiMassimo Goldstein. “You’re going to need to get to winners faster than other folks, more efficiently than other folks. If you don’t, you’re going to be on the losing end of the category.”

The announcement of the public offering marks a turnaround for Rovio, which struggled financially in the years after the initial release of Angry Birds. The company, which started out by selling its games, was caught flat-footed as consumers gravitated to games offered through a so-called freemium model, in which players download the game for free and pay for additional features. Rovio has since switched from paid apps to free downloads of its games.

Mikael Hed, a co-founder, stepped down as its chief executive in 2014, and the company announced plans to cut nearly 40 percent of its work force the next year. (Mr. Hed is still executive chairman of Rovio Animation, which helped bring “The Angry Birds Movie” to the big screen last year.)

Rovio returned to a profit in 2016 and reported revenue of 191.7 million euros, or about $228 million, last year.

Rovio is the latest game maker to turn to the public markets after becoming a cultural phenomenon, following in the footsteps of Zynga and King Digital.

Zynga, the company behind not only FarmVille but also Words With Friends, was valued at $7 billion when it went public in 2011. Its shares are now trading at a third of the initial price.

The company rose to fame with social games played on Facebook, but it was slow to recognize the move to mobile gaming. While it has since shifted its focus, the company has not been able to repeat its earlier success.

King Digital, the Swedish maker of Candy Crush, went public in 2014, but was sold for about $5.9 billion a year later to Activision Blizzard. It sold at a discount to its initial listing price as it struggled to replicate the success of its biggest hit.

The founder of Supercell, a Finnish rival behind the hit Clash of Clans, opted not to pursue an initial public offering, instead selling a 51 percent stake to the Japanese telecommunications giant SoftBank in 2013 for about $1.5 billion. Last year, the Chinese internet giant Tencent paid $8.6 billion for a controlling stake in Supercell.

Rovio said that the aim of the initial public offering was to help it carry out a growth strategy, and that it would use its shares for possible acquisitions and rewards to its employees.

Rovio said the initial public offering would consist of the sale of stock by its main shareholder, Trema International Holdings, and other shareholders. The company is also seeking to issue additional shares worth €30 million, or about $36 million, in the offering.

“That’s really the question for the market around this I.P.O.: To what extent do we believe the company can exploit its existing intellectual property, and to what extent can it go again and deliver another big hit?” said Will McInnes, the chief marketing officer at Brandwatch, which monitors social media trends.

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To: Glenn Petersen who wrote (338)9/16/2017 6:06:03 AM
From: Glenn Petersen
   of 358
Rovio found success in a smartphone game that pitted a brightly colored feathered flock against an army of green pigs, spawning a series of sequels, a line of toys and clothing, and a feature film. Now, the Finnish company is planning an initial public offering that could value the company at roughly $2 billion, in a test of whether investors will find favor in a single franchise and whether the business can evolve.

Apparently not:

Angry Birds IPO expected to value parent Rovio at $1 billion

by Katie Roof
September 15, 2017

Remember Angry Birds? Well, apparently enough people are still playing it to justify an IPO.

Rovio Entertainment, the Finnish parent of the popular smartphone game, is getting ready to go public on the Helsinki Nasdaq in two weeks. And it’s set the price range for an IPO that would value the company at about $1 billion, a lot less than the more than $2 billion they were said to be hoping for.

But it will still be a “unicorn” if it goes public at the €10.25 to €11.50 per share that the company is targeting. The IPO will raise about €30 million.

Angry Birds apps have been downloaded 3.7 billion times since it was launched in 2009. It was able to leverage the success of the game and turn this into “The Angry Birds Movie” last year.

The company has raised at least $42 million in equity funding from Accel, Atomico, Felicis Ventures and others.

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To: Glenn Petersen who wrote (339)9/30/2017 8:41:01 PM
From: Glenn Petersen
   of 358
After a 4% pop, Rovio closes at a lackluster €11.50, level with its IPO price

by Ingrid Lunden ( @ingridlunden)
September 29, 2017

Rovio, maker of the Angry Birds gaming franchise, saw a small pop of 4.3 percent in its first day of trading as a public company, but like the very birds that get catapulted in Rovio’s original blockbuster game, the rise was not to last.

After pricing its IPO at €11.50 per share — the top of its range — to raise €30 million, today the stock opened on the Nasdaq Nordic exchange at €12.00, up 4.3 percent. But then, after morning trading took it as high as €12.34 a share, Rovio ( trading as ROVIO) has fallen down to hovering around the same price it was yesterday evening, €11.50/share. And it’s actually dipped below that, going as low as €11.35 at one point. Its current market cap is $1 billion (€896 million).

Rovio had said yesterday that its initial offering price of €11.50 was oversubscribed and valued it at $1 billion, although previously the company had hoped for a $2 billion valuation. It appears that the U.S. waking up has done little to boost trading so far. Rovio’s 37,073,010 IPO shares were offered to private individuals and entities in Finland, Sweden and Denmark and in private placements to institutional investors in Finland and internationally.

Rovio counts the U.S. market as one of its very biggest — the company said that “most” of its revenue comes from North America and Europe — and it also has a high profile there. But unlike Spotify, another company based out of the north of Europe that counts the U.S. as a key area for current business and future growth, Rovio chose to list closer to home.

Rovio once had designs to become the next Disney. But the fortunes of gaming companies rise and fall with the popularity of their titles, and that has impacted that lofty goal. (Indeed, you could argue that this has been a sticking point for some other gaming companies that have gone public in recent years, such as King — which eventually sold to Activision Blizzard — and Zynga. Their economics do not necessarily follow those expected of public companies.)

Rovio has had a number of strong follow ups to the original Angry Birds — it had three mobile in Apple’s top 100 highest grossing apps over the summer, for Angry Birds Blast, Angry Birds Evolution and Angry Birds 2 — but no new brand so far has quite broken through as a blockbuster in quite the way as the original Angry Birds did.

According to Verto Analytics, the Angry Birds franchise (comprising all the titles) has seen its monthly US visitors over the age of 18 tripled over the last year. There are now 5.9 million visitors compared 2 million in July 2016. But while Angry Birds (2.1 million visitors) and Angry Birds 2 (1.4 million visitors) have grown respectively by 351 percent and 128 percent, Angry Birds is down from a peak of 3 million earlier this year.

“Even the most successful Angry Birds titles still lag well behind flagship offerings from their biggest rivals: King’s Candy Crush Saga has 10.2 million monthly uniques and Supercell’s Clash of Clans has 5.6 million,” noted Connie Hwong, of Verto, who also questions the model of building a number of games around a single brand.

“King and Supercell have exercised greater restraint in rolling out expansions or sequels to their existing mobile games franchises,” Hwong wrote. “Candy Crush has a handful of sequels while Clash of Clans has just one spinoff, Clash Royale. Is a smaller, more carefully edited catalogue of game titles a better bet for mobile game companies?”

Rovio has been right-sizing in a different way: after investing in a number of areas in its “Disney” heyday, the company has since pulled back on many of its most ambitious ventures outside of games (such as amusement parks) in favor of a licensing model, where a third party takes on the investment and risk of new projects.

Other moves in the future for the company will include more geographic expansion. With China currently the world’s biggest market for gaming, Rovio is focusing its strategy there.

“We are working on a number of high profile potential partnerships in China,” Rovio’s EVP of games, Wilhelm Taht, said in an interview with TechCrunch last month. In China, foreign companies need to align with a local company in order to build a business in the country. “We have gone through several potential partnerships and with 600 million downloads in the region already, we will try to strengthen the China business.”

The company reported revenues of €266 million ($314 million) for the year that ended June 30, 2017, with an operating profit of €29,483 ($35 million).

We are updating this story with more detail and price changes throughout the day.

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From: Glenn Petersen10/25/2017 9:32:20 PM
1 Recommendation   of 358
Not specific to Zynga, but an interesting article on the "art" of casual game development:

Silicon Studio’s Yokozuna software is part of a bigger trend of artificial intelligence researchers looking to video games for complex challenges beyond chess and Go. Many of the recent advances in natural-language processing, and image and speech recognition, have come from deep learning, an AI sub-discipline that requires human-labeled data to work. Video-game environments are a good source of data because every interaction is recorded.

Game Makers Are Profiling Players to Keep Them Hooked

By Pavel Alpeyev and Yuji Nakamura

-- Psychological profile used to influence behavior, spending

-- Deep-learning software used to predict player actions

In the game industry of today, titles like Clash Royale and Pokemon Go are free for most people because there’s a small number of players who pay for extras like special weapons and more lives. Game developers have to strike a delicate balance in this free-to-play model between drawing the masses and encouraging big spenders -- and they need both for a successful title.

The dashboard of Silicon Studio’s Yokozuna software.
Source: Silicon Studio

Silicon Studio Corp. is trying to help by providing game makers with deep-learning algorithms to create what amounts to a psychological profile of each player. The Tokyo-based company’s software predicts how long people will play, what levels they might achieve, how much money they might spend and on what. Even more important, the technology lets game creators mold player behavior to keep them hooked.

“Game data is perfect for studying human behavior,” said Africa Perianez, chief data scientist at Silicon Studio and a former nuclear physicist at the European nuclear research organization CERN. “It’s going to change the industry, change the direction of personalized games.”

The machine-learning software, called Yokozuna Data after the highest rank in sumo wrestling, is drawing customers. Three publicly-traded Japanese publishers and a South Korean developer have signed up to use the product, Perianez said, declining to give their names because of confidentiality agreements. The company is also in talks with large European publishers of massive multiplayer online role-playing games, Perianez said. Silicon Studio shares rose as much as 3.8 percent in Tokyo trading.

Japanese and South Korean game publishers pioneered the art of making money from free-to-play titles. For years, they employed so-called live ops teams that use events, competitions and limited-time offers to get people to pay up. As those techniques mature, companies are turning to artificial intelligence and data-mining to influence players -- strategies similar to those Google and Facebook Inc. use for targeted advertising.

Silicon Studio was founded in 1999 as a unit of Silicon Graphics, the U.S. maker of high performance computers used for special effects in “Jurassic Park.” The company was spun off the following year to focus on software tools for other game makers, like Yokozuna, and develops its own games.

"It’s an extremely geeky company,” said Serkan Toto, founder of consultant Kantan Games Inc. “For years they’ve done heavy lifting like creating rendering and physics engines, before getting into publishing games.”

The company listed on the Tokyo Stock Exchange in February 2015 and saw its market cap climb to 44 billion yen ($390 million) within a month. Silicon Studio wasn’t able to deliver lasting hit titles and shares have declined more than 80 percent since. Its market value is now about 8.5 billion yen.

Yokozuna, which was in development for two years, can tailor promotions to specific groups or individuals. For example, users at risk of quitting a game like GungHo Online Entertainment Inc.’s Puzzle & Dragons may find it easier to win rare monsters or faster to advance through game levels. For Niantic Inc.’s Pokemon Go, Yokozuna could help schedule extra events for a holiday weekend -- and customize walking distances based fitness.

A key challenge in free-to-play gaming is maintaining a healthy ecosystem of players who spent a lot (called whales) and those who never pay (krill). Industry insiders, who favor marine-biology terms, call casual spenders dolphins. Whales usually comprise 1 percent of all players, but generate half of total revenue. Though krill may seem irrelevant for game developers since they don’t pay, they are essential because paying users need competition from others to hand over their money. The whales need something to eat.

Silicon Studio has been using deep learning algorithms to tailor promotions to specific groups or individual players.
Source: Silicon Studio

As more smartphone games became available for free, the industry adopted micro-transactions to generate revenue, selling digital trinkets and tokens. Even the simplest games operate virtual economies, with startups such as Scientific Revenue and Gondola offering analytics and dynamic pricing tools.

Enticing players to pay with custom incentives is tricky though. In July, fans of Zynga Inc.’s CSR Racing 2 game revolted when they discovered some gamers paid $35 for content that others got for $5. The company apologized and offered compensation.

“One thing that is important to gaming culture is the sense of an even playing field,” said Jane McGonigal, the author of the New York Times bestseller “Reality is Broken” and a game developer.

Silicon Studio’s Yokozuna software is part of a bigger trend of artificial intelligence researchers looking to video games for complex challenges beyond chess and Go. Many of the recent advances in natural-language processing, and image and speech recognition, have come from deep learning, an AI sub-discipline that requires human-labeled data to work. Video-game environments are a good source of data because every interaction is recorded.

“There is no other field that has better data,” said Perianez, who previously worked on predictions of mobile subscriptions and Coca-Cola sales. “You can measure habits continuously for years.”

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From: Glenn Petersen11/11/2017 10:14:36 PM
   of 358
Zynga pays $100 million for Peak Games’ casual card game studio

Dean Takahashi @deantak
November 7, 2017 1:05 PM

Above: Okey Plus
Image Credit: Peak Games

Zynga has acquired the mobile card game studio of Turkey’s Peak Games for $100 million in cash. The move is one of the biggest acquisitions Zynga has made under Frank Gibeau, who became CEO in March 2016. It’s also a big validation for Peak Games’ strategy of focusing on casual card games that are popular worldwide, like spades and gin rummy.

Zynga will get Peak’s card games such as Spades Plus, Gin Rummy Plus, and Okey. The latter is based on a popular Middle Eastern board game. Peak Games will retain its Toy Blast and Toon Blast games, and remain an independent company in Istanbul.

The deal is a big one for Zynga, which previously paid $527 million when it acquired NaturalMotion, a studio that made games such as CSR Racing and Dawn of Titans.

In an interview, Gibeau said acquisition is one of a few ways that Zynga is trying to increase its overall revenues. It is focused on growing its current base through services (live operations like events or tournaments), adding sequels to existing games, launching new intellectual properties, and acquiring licensed brands for new games.

Above: Frank Gibeau, CEO of Zynga.
Image Credit: Zynga

“With Peak, we felt there was an opportunity to work with them to bring their games to our portfolio of card games,” Gibeau said. “They have the largest mobile rummy game in the world, and the largest spades game in the world.”

Peak has been making games for seven years, with a focus on mobile casual card games as well as the Blast series of mobile games. Peak Games founder and CEO Sidar Sahin will stay with Peak and operate it as a separate company.

“The opportunity was to acquire this piece of the company,” Gibeau said.

While Zynga’s own card games have common users with Peak’s games, Gibeau said that for the most part that Zynga will be acquiring new audiences with the Peak games. Zynga currently has 1,524 employees, and it will add Peak employees as well.

Peak Games titles grossed more than an estimated $165 million from the App Store and Google Play worldwide during the first three quarters of 2017, according to measurement firm Sensor Tower. Compared to the same period in 2016, this revenue grew approximately 145 percent.

Its highest-grossing title, Toy Blast, earned more than an estimated $124 million, or about 75 percent of the total.

After Toy Blast, its next largest earners are card games Okey Plus, Spades Plus, and Gin Rummy Plus, which grossed an estimated $18 million, $9 million, and $8 million, respectively during the first three quarters of this year.

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From: hollyhunter11/20/2017 8:20:16 AM
   of 358
looking better after some consolidation. On watch for clear above 4.09.

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From: Glenn Petersen5/2/2018 11:11:29 PM
   of 358
Zynga founder Mark Pincus is giving up voting control of his gaming company: ‘It’s time’

In an unusual move, Pincus doesn’t want the final say anymore and wanted more freedom.

By Kara Swisher @karaswisher
May 2, 2018, 4:05pm EDT

In an unusual move for a Silicon Valley company, Zynga chairman Mark Pincus has given up voting control of the social gaming company he founded more than a decade ago.

The establishment of voting rights parity — basically, one share, one vote — rids the company of its longtime multi-class share structure that concentrated all power in the hands of one person. What that means is that Pincus’s 70 percent voting power over Zynga will convert into a 10 percent economic stake. Under the Zynga plan, his high-octane voting shares will convert into Class A common stock in the San Francisco-based company.

Pincus is also shifting his title to non-executive chairman but will remain on its board.

That much-celebrated “power of the founder” has been common in tech, with companies like Facebook and Google continuing to concentrate voting control in the hands of a startup’s creators with the aim of resisting undue shareholder pressure and staying true to their vision.

Pincus said that was no longer needed at Zynga, since the company has stabilized after several years of turmoil. Thus, he said, he felt “it’s time” to move to a new corporate structure and also remove himself from active management in the company. He had done that once before, stepping back in 2013, only to return in a more prominent role in 2015.

“Given our positive momentum, now is the right time to simplify our stock structure and transition to one share, one vote. I believe it’s in the best interests of our shareholders to establish voting rights parity for all,” Pincus said in a statement.

In a longer interview this morning, he noted that he also wanted space to undertake a number of other things in investing and elsewhere.

“When I came back, I put my other aspirations on hold,” said Pincus, noting he has become interested in areas like blockchain and building a new internet (yes, he gets the reference to the HBO show, “Silicon Valley). “But now it’s time to create more space between me and the company to do that as a separate person and entity ... I have a lot of pent-up ideas and energy that for well over a year I have wanted to pursue.”

More importantly, said Pincus, the founder-as-ruler concept may have outlived its usefulness, at least at Zynga. “We asked ourselves, is there a benefit to this, and I think it is a healthy debate for any company to be having,” he said. “Recently, my control did give air cover for the team, but that is not needed any longer as we have become more stable.”

Zynga CEO Frank Gibeau agreed. “When Mark approached the board with this idea, we thought it was a good time, because we were growing with a lot of momentum and this change makes us more accountable to shareholders,” he said. “When we are not worried about defense but growing the company, a one-share-one-vote structure where everyone’s economic interests aligned is positive to shareholders. The perception of a controlling shareholder causes that to skew and this gives us a clean road ahead.”

Zynga was founded in April of 2007, taking off like a rocket ship via its game integration with Facebook. With Pincus as its energetic and high-profile leader, it went public in late 2011. According to Zynga, it had three classes of stock ownership, with its Class C common shares — all held by Pincus — getting 70 votes per share. Class B shares, which Pincus held a majority of, got seven votes per share and Class A shares had one vote each.

Under the new structure, all Zynga shareholders will have equal voting rights.

Zynga’s shares have certainly recovered over the last several years, after getting hit by changes at Facebook and in the mobile market. Its stock price dipped below $2 a share in early 2016, but it has now risen to $3.61.

While still in turnaround, the company reported stronger first-quarter results today and has announced more stock repurchase programs. Recently, under Gibeau, its flagship games and live services, like “Words With Friends 2” and “Zynga Poker,” have seen solid growth.

While not directly commenting on current Silicon Valley giants like Google and Facebook, which continue to give founders huge latitude, he did note that there will be some pushback on the idea that “founders don’t feel accountable to shareholders.”

Added Pincus: “Is the value we were worried about at founding served by multi-class structures? It’s no longer obvious what benefit it has given. So many companies like this are now in amazing positions that seem very well aligned with visions of founders.”

If you want to read more from Pincus, here is his blog post.

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From: Glenn Petersen5/30/2018 8:54:21 PM
   of 358
Zynga buys 1010 maker Gram Games for $250 million

Dean Takahashi [url=]@deantak [/url]
May 30, 2018 6:02 AM

Above: Gram Games founders Mehmet Ecevit (left) and Kaan Karamanci.
Image Credit: Gram Games

Zynga has acquired 1010 mobile game maker Gram Games for $250 million in cash plus other considerations.

Frank Gibeau, CEO of San Francisco-based Zynga, said in an interview with GamesBeat that the company will also pay an earnout, or bonus, over three years if Gram Games hits unspecified financial targets.

Gram Games has studios in Istanbul, Turkey, where it was founded in 2012, and in London. Gram Games currently has nine live games, including 1010 and Merge Dragons, which is a top-50-grossing game in the U.S.

Above: Gram Games’ Merge Dragons.
Image Credit: Gram Games

Zynga will add Gram’s 77 employees to its roster, and Gibeau said the deal could add to the company’s “forever franchises,” or long-life live services games such as Zynga’s Words With Friends franchise.

“Their franchises are in good shape, and we are very excited to bring them into the company,” Gibeau said. “They have a unique way of building games through rapid prototyping with small teams.”

“Gram Games helped define the hyper-Casual genre with games like 1010 and Six, and we continued to grow our footprint with Merge Dragons,” said Kaan Karamanci, cofounder of Gram Games, in a statement. “We look forward to marrying our unique approach to game making with Zynga’s live services expertise to grow our games and continue to delight millions of players around the world.”

Above: Gram Games’ studio in Istanbul
Image Credit: Gram Games

Gibeau added, “They focus on culture and creativity. We will keep them as is, and they will operate as an independent studio inside our company.”

Gram Games has 3 million daily active users, and its free-to-play games have been downloaded more than 170 million times. Gibeau said Gram has good games in its pipeline as well.

Gibeau said the acquisition will be accretive at the outset, and the company will remain committed on delivering its guidance for the fiscal year. Gibeau said the price Zynga paid was two to three times the revenue that Gram generates.

“We are proud to join Zynga and combine Gram Games’ unique culture, talented team and hit games with Zynga’s world-class organization,” said Mehmet Ecevit, Gram Games CEO, in a statement. “We believe deeply in Zynga’s mission to connect the world through games and are excited to work with Frank and the rest of the Zynga team on our next phase of growth.”

Above: Gram Games’ studio in London
Image Credit: Gram Games

“We were drawn to the talent of the team,” Gibeau said.

The deal is similar to Zynga’s purchase of assets from Peak Games, another Istanbul-based game studio. Zynga paid $100 million last year for Peak’s casual games studio.

“This deal fits with Peak Games in a lot of ways, as both have talented teams with strong creativity and big opportunities, both globally and in emerging markets,” Gibeau said.

Zynga said it expects to hits its previous guidance for earnings for the second quarter. Gibeau said that for GAAP (generally accepted accounting principles) purposes, Zynga does not expect any significant revenue impact from Gram Games, as the expected bookings generated in Q2 of $10 million will be accounted for as an increase in deferred revenue and recognized as revenue in future quarters.

Zynga expects a reduction to its adjusted earnings before income taxes, depreciation, and amortization (EBITDA) of $8 million, as a result of the $10 million increase in deferred revenue partially offset by $2 million of expected operating contribution

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