Zynga made huge offers to buy both PopCap, a top casual game developer, and Rovio, the developer behind the Angry Birds series, but both companies walked away from the deals thanks to Zynga’s tough internal culture.
PopCap, which makes games like Plants vs. Zombies and Peggle, walked away from around $1 billion thanks to Zynga’s reputation for rescinding shares and internal competition, according to a report by the New York Times. Zynga also offered Rovio $2.25 billion, but failed to close that deal.
A source familiar with the situation told us Zynga was not internally aware of a $2.25 billion offer, so it wasn’t clear whether that was what the actual offer was or if that was the price Rovio sought. The source said Zynga was not willing to pay the price Rovio wanted.
One source close to the matter also told us the PopCap deal from EA was more lucrative because the earn out targets were relatively easy to reach, resulting in a deal that was closer to $1.25 billion rather than the $750 million originally declared by EA and PopCap.
New York Times’ Evelyn Rusli paints a picture of turmoil inside Zynga, citing several former senior employees at Zynga that asked to remain anonymous:
General managers submit weekly reports, measuring factors like traffic and customer satisfaction. Every quarter, teams assess their priorities under an Intel-pioneered system called “objectives and key results.” And Mr. Pincus, a professed data obsessive, devours all the reports, using multiple spreadsheets, to carefully track the progress of Zynga’s games and its roughly 3,000 employees.
But the heavy focus on metrics, in this already competitive industry, has also fostered an uncompromising culture, one where employees are constantly measured and game designers are pushed to meet aggressive deadlines. While some staff members thrive in this environment, others find it crushing. Several former employees describe emotionally charged encounters, including loud outbursts from Mr. Pincus, threats from senior leaders and moments when colleagues broke down into tears.
While it seems harsh, Zynga is still a startup that CEO Mark Pincus built from the ground up a short four years ago. It’s now about to make its trading debut on public markets and raise up to $1 billion in its IPO. Like many startups, Zynga is a tough meritocracy that rewards its highest-performing employees, which can be troublesome for some:
For the top performers, the rewards are handsome. Zynga dispenses lavish gifts like vacations and $100,000 in vested stock. After the game Mafia Wars reached a milestone two years ago, Zynga sent the team to Las Vegas to celebrate, buying some 80 plane tickets and providing $500 in cash for each person and luxury hotel accommodations, according to one former senior employee.
We’ve contacted Zynga to confirm whether there were deals in place, but given that the company is in a quiet period we don’t expect them to speak about them.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.