Zynga Reportedly Buys Astro Ape Studios for New York Office
Zynga reportedly bought another mobile social gaming company called Astro Ape Studios to bulk up its Android and iOS efforts.
When we first heard rumors of the deal yesterday, we reached out to Astro Ape Studios, which didn’t return requests for comment. Zynga also declined to comment. However, many of Astro Ape’s employees, including chief executive Chieh Huang, chief creative officer Christopher Cheung and chief technology officer William Fong, have all taken titles on LinkedIn at Zynga’s New York office.
Astro Ape’s titles like Dessert Heroes and Office Heroes have not been highly ranked on the overall top lists for the last few months so the price may not have been much more than the typical talent acquisition range. Office Heroes had some initial success last year, but it quickly declined afterward. Japan’s DeNA invested an undisclosed amount in Astro Ape last year.
Mobile is one of Zynga’s largest priorities this year as the company looks to mitigate its biggest risk: its overwhelming dependency on the Facebook platform. Coupled with its efforts on Google Plus, Zynga is looking to diversify and with several mobile gaming companies looking at topping $50 million in sales this year, Android and iOS are a promising bet. Yet Zynga has had a mixed record in terms of success on both platforms; its number of titles on the top-grossing list has gradually increased over the last six months with improvements to games like Zynga Poker. But it’s also had a few mediocre debuts like Cityville Hometown.
Zynga has made a series of acquisitions over the past year including Words With Friends-maker Newtoy for $53.3 million in cash and stock, U.K.’s Wonderland Software and Toronto’s Five Mobile. Zynga said in a recent amendment to its IPO filing that it paid $7.5 million for an acquisition in July, although it did not specify which company it was.
The issue with mobile right now is that it’s anecdotally difficult to hire because the opportunity cost to start an independent gaming studio is so high. Many of the largest companies in the space, with multiple titles on the top-grossing charts, could be valued at hundreds of millions of dollars based on PopCap’s valuation at the time of sale to Electronic Arts and the market capitalizations of publicly-traded companies like Glu Mobile and Gamevil. Storm8 has been rumored to be seeking a $1 billion on a $300 million round, although we find that this may be high in terms of revenue multiples.