Last year, Zynga acquired OMGPOP for around $200 million. Today, Zynga has shut down OMGPOP for good. A waste of an investment, you say? Maybe. Yesterday, the Internet was abuzz with news of massive layoffs at Zynga. It turns out, today, that those layoffs were of the "lets get rid of everyone that worked at OMGPOP." The layoffs were followed by the completely closing up of the OMGPOP offices in NYC.
Layoffs happen all the time after a company has been acquired. It's the way that Zynga let the OMGPOP studio go that's bothersome. Instead of notifying employees, OMGPOP staff went to work yesterday to find the office shuttered. What happened? Further, what will happen with OMGPOP games?
A Culture Clash
When one company pays nearly $200 million to acquire another company, it's usually within the best interest of the acquiring company to keep the purchased company intact as much as possible. Zynga and OMGPOP staff simply didn't get along from the start. Zynga purchased OMGPOP when the company was at the height of its success with the popular game 'Draw Something.'
Unfortunately, Zynga made a bad investment. As soon as Zynga forked over that massive sum of cash, OMGPOP's 'Draw Something' fizzled out. The company wasn't able to keep games going Rovio style, and this has lead to a loss for Zynga. It has to be remembered, though, the Zynga still owns the OMGPOP brand - even though the people behind OMGPOP are gone.
The Future of OMGPOP's Online Gaming Portal
Will Zynga keep OMGPOP's online gaming portal operational? Right now, the portal is still up and running, but there's no telling what Zynga might do with the former OMGPOP brand. So far, Zynga hasn't weighed in on the situation. It's still hard to ignore that really bad investment deal, though.
There have been some rumors that Zynga will try to keep the OMGPOP brand going, but Zynga has faced its share of troubles when it comes to keeping gamers too. Zynga game users aren't always thrilled with company choices, games, and other pieces of the Zynga puzzle. Now that Zynga has gotten rid of the former OMGPOP staff, some fans might call Zynga quits.
Will This Impact You?
Zynga currently owns the rights to many popular games including Farm Ville 2, City Ville, Zynga Poker, and many others. If you currently play any of these games, the lineup shouldn't change too much. If anything, Zynga will attempt to protect its currently popular games. If this isn't possible (and it might not be without the OMGPOP developers), Zynga might have to start getting rid of some games.
If you're feeling bad for the OMGPOP staff, don't. Most of these developers have other jobs lined up, and many were offered a decent pay-off (according to tweets related to the split). Currently, online gamers seem to be behind OMGPOP on this one, but we will see what the future holds. Did Zynga make a bad investment? It certainly seems that way. Did Zynga make a mistake? Maybe.