Farmville 2 / Zynga and Clumsy Ninja / NaturalMotion
As my colleague Mike Isaac noted yesterday, Zynga has acquired NaturalMotion for more than half a billion dollars, and in the process it effectively gets two companies: The games company behind hits like CSR Racing and Clumsy Ninja, and the middleware company responsible for the fluid body animation found in Grand Theft Auto V.
I’d argue that the latter is the more important half, even though Zynga expects its new acquisition’s games to bring in some $70 million to $80 million this year. NaturalMotion has some popular games and impressive numbers, but so did Draw Something creator OMGPOP back in 2012 (and we all know how that turned out).
If Zynga were doubling what it paid for OMGPOP in yet another bet on its ability to sustain some outsider’s hot new games, investors might have cause for concern. But the technology that NaturalMotion controls changes everything.
In Zynga’s Q4 earnings conference call, CEO Don Mattrick said NaturalMotion will continue to be able to license its Euphoria engine for simulating lifelike, artificially intelligent game characters to outside parties. But one of the terms of the deal, he added, is that Zynga “owns the exclusive, proprietary rights to develop this breakthrough technology and apply it to any of our existing and future mobile games.”
Consider the case of the FarmVille games, which CFO Mark Vranesh said are responsible for some 41 percent of Zynga’s current revenue. Although FarmVille 2 was a decent graphical improvement over the first FarmVille, the five-year-old game still looks like something you might have found running on a PC 10 or 15 years ago.
Sprucing up the cash cow (sorry, accidental farm pun) and making it look more like the vibrant 3-D world of Clumsy Ninja could go a long way toward helping it stand out. And it will need to stand out, soon: Mattrick said FarmVille would be making its mobile debut in Q2 of this year, and a different farming simulator game — Supercell’s Hay Day — currently dominates on phones and tablets.
As NaturalMotion CEO Torsten Reil told me in an interview earlier this month, one of his company’s key design criteria is word of mouth, something Zynga execs echoed on the investor call. If Mattrick & co. want to challenge Supercell head-on, a little buzz-generating pizzazz might be just what the doctor ordered.