It's Obvious Why Zynga Wanted PopCap So Badly

mark pincus zynga

Photo: Illustration: Ellis Hamburger

After Electronic Arts bought web and mobile games-maker PopCap, it came out that Zynga offered $1 billion in cash for the company. This seems crazy: it would have exhausted almost all its cash pile, and it had secured lines of credit from investment banks to pay for it. For sure PopCap is a great business, but is it worth spending almost all your cash reserves and getting into debt to own it? 

Now we know why Zynga was so desperate: its amended IPO filing revealed new details about Zynga’s relationship with Facebook, which is much deeper than we thought. In particular, most of Zynga’s biggest hit games are exclusive to the Facebook platform, and Facebook seems to have almost a veto on what games Zynga can make on other platforms. 

Buying PopCap would have solved this massive problem in one fell swoop: all of a sudden it would have had a huge asset, with huge titles, completely outside Facebook.

Unfortunately for Zynga, PopCap took EA’s offer.

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