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Zynga Pays $100 Million for Turkish Mobile Card Game Assets

Updated on
  • Deal adds to Zynga’s portfolio that includes poker, solitaire
  • Acquisition is biggest yet during CEO Gibeau’s tenure

Zynga Inc. wants to be the go-to place for mobile card games.

The San Francisco-based online gaming pioneer is acquiring the copyrights for mobile card game business of Turkish game designer Peak Games for $100 million in a deal expected to close in the fourth quarter. The Peak business is profitable and will add to earnings, Zynga Chief Executive Officer Frank Gibeau said in an interview.

The deal is the biggest yet for Gibeau since he replaced co-founder Mark Pincus last year. The Peak studio makes mobile games with titles such as Spades Plus and Gin Rummy Plus as well as ones based on a popular Turkish game called Okey. The acquisition will add to a Zynga portfolio that already includes games based on poker and solitaire.

Mobile revenue from the popular Zynga Poker game jumped 78 percent in the third quarter as the company attracted new players and expanded sales from tournaments and other contests, Gibeau said. The company reported overall revenue Tuesday of $224.6 million, topping analysts’ projections of $212.4 million.

But Zynga’s fourth-quarter forecast for sales of $215 million trailed the average estimate of $222.5 million. The shares fell 1.9 percent in late trading.

New titles in the current quarter include Words With Friends 2, a sequel to the company’s popular word game, and an augmented reality version of its CSR2 racing game.

‘Casual Puzzle’

The assets sold to Zynga accounted for “a small part” of Peak’s revenue, said Omer Inonu, strategy director at the Istanbul-based company. Zynga plans to set up a company in Turkey and take on the staff who work at the business Peak sold to it, Inonu said in an interview.

Peak, founded in 2010 by Turkish mobile developer Sidar Sahin, has more than 500 million players for its “casual puzzle mobile games,” Toy Blast and Toon Blast, which are currently adding 3 million users a month in the U.S., Inonu said. The U.S. accounts for 70 percent of the company’s revenue, making Peak one of the top 10 mobile-game developers by sales and users in the country, Inonu said, adding almost all of its revenue comes from outside Turkey.

Peak aims to become the biggest mobile-game company in the world, Inonu said, declining to give a time frame. Berlin-based Earlybird Venture Capital Fund IV invested $11.5 million in the company in 2011 and Antwerp, Belgium-based Hummingbird Ventures an undisclosed amount in 2010.

The global mobile-game market is estimated at $46 billion this year, according to Peak, which cited data from games-market intelligence provider Newszoo.com. The U.S. market is set to expand 30 percent to $13 billion this year, according to the data.

Code Advisors LLC was the financial adviser for Peak and Baker McKenzie LLP and its Turkish partner Esin Avukatlik gave legal support, he said.

(Updates with Peak Games executive’s comments starting in seventh paragraph.)
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