Zynga buys NaturalMotion for $527 million

Zynga has announced the purchase of UK game-maker NaturalMotion for $527 million.

Oxford-based NaturalMotion has had a string of mobile game hits, such as CSR Racing and Clumsy Ninja. Its purchase gives Zynga an entry into the lucrative mobile games market.

As news of the deal emerged, Zynga also reported a loss of $25 million for the fourth quarter.

It said it would trim its workforce by 15% – equivalent to about 314 jobs.

“We believe that bringing Zynga and NaturalMotion together is the right step at the right time,” said Zynga chief executive Don Mattrick in a statement.

“Our acquisition of NaturalMotion will allow us to significantly expand our creative pipeline, accelerate our mobile growth and bring next-generation technology and tools to Zynga that we believe will fast-track our ability to deliver more hit games.”

In a note to employees, Don Mattrick highlighted that with the acquisition, Zynga will now have five top gaming brands: Farmville, Casino, Words with friends, CSR Racing and Clumsy Ninja in the “people” category.

NaturalMotion’s Clumsy Ninja has been rated more than 78,000 times in the US and UK version of Apple’s App Store – the vast majority of them positive.

Don Mattrick also told employees the acquisition gives Zynga access to NaturalMotion’s Euphoria technology, which helps create realistic motion for characters in movies and games.

The takeover of the 13-year-old firm is being interpreted by some as Don Mattrick’s bet on character-driven intellectual property.

As part of the terms co-founder of NaturalMotion, Torsten Reil, will stay on and report to Don Mattick, and new games will continue to be released under the NaturalMotion brand.

Zynga has struggled to replicate the success it has had with desktop games Farmville and Mafia Wars and has been unable to generate new hits on smartphones.

This is seen as a crucial weakness, as more and more consumers play games on their phones.

NaturalMotion is the biggest acquisition for the firm, and it comes after Zynga bought OMGPOP for $180 million in 2012, only to see that firm’s flagship game, Draw Something, shed users.

In June, Zynga announced it would cut 18% of its workforce and then a month later, it was announced that Don Mattrick would take over from the company’s founder Mark Pincus.

The $25million loss actually represents good news for Zynga: it is 43% lower than the same period last year.