Zynga Lays Off 15 Percent Of Staff, Acquires Euphoria Engine Creator

by Mike Futter on Jan 30, 2014 at 11:15 AM

Zynga has announced today that it has laid off 314 employees in an attempt to create “a more efficient organization.” The news was delivered to the company via email from CEO Don Mattrick and posted on the company’s website.

“We don’t take these decisions lightly but we believe these actions will allow us to create a clearer, faster path to win,” Mattrick writes.” “On a personal note, these are extremely difficult but important actions that are helping us drive improved results and create a new foundation for future growth.” Zynga laid off 18 percent of its staff in June 2013, and closed a number of studios in August 2013, including Draw Something creator OMGPop.

In the same memo, Mattrick announced the acquisition of NaturalMotion, a mobile game developer better known for creation of the Euphoria engine used in Star Wars: The Force Unleashed and Grand Theft Auto V. ”Combining NaturalMotion’s strengths with Zynga’s ability to develop breakthrough social features while sustaining live games over time, offers us a huge opportunity to redefine the gaming industry and deliver consumers blockbuster entertainment experiences,” Mattrick writes.

The Wall Street Journal is reporting that Zynga paid $527 million for NaturalMotion. Inclusive of NaturalMotion operations, Zynga is forecasting a loss of $49 million to $56 million for first quarter of its next fiscal year (ending March 31, 2014).

[Source: Zynga, Wall Street Journal]


Our Take
This is a smart move for Zynga, not necessarily because NaturalMotion makes amazing games, but because it owns a popular piece of middle-ware. Every time someone licenses Euphoria now, that money goes straight into Zynga’s coffers. If the company is smart, it will enable NaturalMotion to continue that line of work, which has long-lasting reward. Our thoughts are with those 314 employees who find themselves out of work today.