Zynga Offers Mobile Word Game by `Draw Something' Creator

Zynga Inc. (ZNGA) released “What’s the Phrase,” a word game for Apple Inc. (AAPL) iPhones, as it seeks to build hit titles for mobile devices to counter slowing demand for social applications played on Facebook Inc. (FB)

The new game is the first app developed by the team behind the popular game “Draw Something” since Zynga acquired OMGPop Inc., the creator of that game, a year ago, Chief Operations Officer David Ko said in an interview this week.

Producing mobile games with the potential to lure millions of smartphone and tablet users is central to Chief Executive Officer Mark Pincus’s plan to revive growth at Zynga. The San Francisco-based company has struggled to make up for fading demand for its core business of Web-based games. Its biggest mobile hits, “Draw Something” and “Words with Friends,” have been created by outside teams it acquired.

In “What’s the Phrase,” players take turns guessing letters to form a hidden phrase, similar to the long-running television game show “Wheel of Fortune.” The title became available in Apple’s App Store yesterday and will eventually be offered for phones running Google Inc.’s Android software, Ko said.

Dan Porter, the former CEO of OMGPop, heads Zynga’s mobile studio in New York and led development of the new game. Some members of the OMGPop team, including former executive Wilson Kriegel, left following the acquisition.

App Maker

Zynga, the biggest maker of online social games, took a writedown of $95.5 million in the third quarter on the value of the mobile-app maker, which it bought for $180 million. The company cited “Draw Something” as the primary reason for a decline in mobile users from the second quarter to the third quarter of last year.

Ko has tried to bring more discipline to the development of games. Last month he said the process will be subject to greater scrutiny by managers and work on new games will be ended if they fail to meet expectations.

Zynga generates revenue by selling virtual goods within its games -- for example, a gun in “Mafia Wars” or a brick oven in “ChefVille.”

Last month, it reported fourth-quarter profit and sales that beat analysts’ estimates as it cut costs faster than demand fell for virtual goods. The company has ended more than a dozen games and cut 5 percent of staff and this week said it is consolidating office locations in New York and closing one site in Baltimore and two in Texas.

The shares rose 1.5 percent to $3.43 at the close in New York. The stock has jumped 45 percent this year, compared with a 6.5 percent gain in the Standard & Poor’s 500 index.

To contact the reporter on this story: Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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