The archive · Consumer Apps · Product decision · 2012–2013
Draw Something: OMGPOP's viral hit, sold for ~$200M, shut down 440 days later
After years of failed games, OMGPOP's mobile hit reached 15 million daily users in six weeks; Zynga paid about $200 million, then closed the studio.
OMGPOP
What the business is
OMGPOP made social and mobile games; its breakout title Draw Something is a Pictionary-style drawing game for phones in which one player draws a word and a friend guesses it.
How it started
OMGPOP had struggled to find a hit, first on its own destination site and then on the Facebook platform; before Draw Something it had accumulated 20 million registered users without a breakout title (TechCrunch).
What happened
Draw Something launched on iOS and Android in early 2012 and took off almost immediately: about 35 million downloads, more than 1 billion drawings and roughly 15 million daily active users within six weeks (TechCrunch, 2012-03-21). On 2012-03-21 Zynga agreed to acquire OMGPOP — TechCrunch reported hearing $180 million upfront plus a $30 million earnout — with CEO Dan Porter becoming a general manager and vice president of Zynga New York and OMGPOP's employees joining Zynga.
How it ended up
The momentum did not survive ownership: The Escapist reported on 2013-06-03 that Zynga had closed OMGPOP, that Draw Something's user numbers fell off dramatically shortly after the acquisition, that a push to monetize with branded words accomplished little, and that the sequel launched in April 2013 failed to match the original.
Background
OMGPOP spent years looking for a hit on its own destination site and on the Facebook platform, building 20 million registered users without a breakout. In early 2012 it released Draw Something, a Pictionary-style game for phones, which reached about 35 million downloads, more than 1 billion drawings and roughly 15 million daily active users within six weeks (TechCrunch).
The spike made OMGPOP a prize: on 2012-03-21 Zynga agreed to acquire the studio, with TechCrunch reporting a price in the range of $180 million upfront plus a $30 million earnout. OMGPOP's CEO Dan Porter became a general manager and vice president of Zynga New York, and the employees joined Zynga as the company pushed to prove itself in mobile beyond Facebook.
The decline came quickly. The Escapist reported on 2013-06-03 that Draw Something's user numbers fell off dramatically after the acquisition, that a monetization push using branded words accomplished little, and that the April 2013 sequel failed to match the original. Zynga closed OMGPOP that June, roughly 440 days after the deal, ending the studio that had finally made its hit.
What has to be true
- Zynga's bet rested on momentum: with about 15 million daily users in under six weeks, Draw Something looked like the mobile growth engine it needed as it diversified off Facebook (TechCrunch).
- The price assumed the hit could be run as a durable service, the way Zynga had doubled Words With Friends after buying it for $53.3 million in 2010 (TechCrunch).
- The audience was borrowed, not owned: Draw Something's user numbers fell off dramatically shortly after the acquisition, so the ~$200 million was paid for a peak (The Escapist).
- Execution compounded the fall: the branded-words monetization push did little, the sequel flopped, and the studio closed 440 days after the deal (The Escapist).
What can be applied
A viral spike is a lead, not a business: Zynga paid about $200 million for Draw Something's momentum at its peak, and the studio was closed 440 days later when the audience moved on.
Aftermath
Zynga closed OMGPOP on 2013-06-03, about 440 days after the deal, as part of wider cuts. The Escapist reported that Draw Something's user numbers fell off dramatically after the acquisition, that monetizing with branded words did little, and that the April 2013 sequel failed to match the original. Dan Porter, OMGPOP's CEO who stayed on at Zynga New York, had said it was mostly true that Zynga copies games before clarifying the remark. Per GameInformer as cited by The Escapist, 440 days under Zynga at the assumed $200 million cost came to about $454,000 a day.
Sources
- Done Deal: Zynga Gets "Draw Something" Phenom By Acquiring OMGPOP. (We're Hearing $210M.)
- Draw Something Studio Falls Victim to Zynga Cuts
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