Zynga reportedly in talks to buy OMGPOP and Draw Something

Wasn’t it just the other day that I speculated that Zynga is probably in talks to buy OMGPOP, makers of the #1 game now on Apple and Facebook, Draw Something?

Well, I was right. According to Techcrunch, Zynga is in early talks to acquire OMGPOP in the $150 – 250 million range. OMGPOP has raised $17 million to date and is also being courted by Japanese gaming heavyweights, Gree and Mobage/ngmoco. As reported, both companies are making a big bid to compete with Zynga in the social and market US market.

Not that I’m bragging. Every online pundit predicted that Zynga would make a bid for OMGPOP; and if OMGPOP says no to them, create their own version of Draw Something. Zynga has a playbook for acquisitions as well as game design, and it’s easy to figure it out.

The question now is, what is OMGPOP going to do? Clearly, they are in the driving seat. Gree and Mobage almost need OMGPOP more than Zynga does, and the fact that OMGPOP traces its roots to Asia (its founder created the company after working in Korea and wanting to bring Asian-style games and business models to the North American market) makes any of these two companies a great fit.

Zynga is a good fit too, given that it bought Newtoy’s Words with Friends and was able to make it such an everyday brand that Alec Baldwin is getting kicked off of planes playing it. Draw Something is the obvious next extension to the Friends brand. Zynga could create their own version, but then they have to compete with an entrenched #1 product and have to deal with the inevitable chorus of complaints that they would have been a follower and copied a game again (though to be fair… Draw Something is just a great online and social version of Pictionary, a game that’s been around since adults have been subjecting themselves to embarrassing board game nights).

If OMGPOP says no to Zynga, they have to both invest heavily to build out marketing programs and server capacity to keep Draw Something number one and contend with the future Zynga mobile drawing game and its marketing onslaught. And, gamers on the phone and mobile are fickle. You can be number one today, knocked off the charts tomorrow. The virility that drives social games to popularity can go both ways.

What’s interesting about OMGPOP is that its actually a veteran in this space, with a big catalogue of browser-based games and a multiplayer online platform. My guess is that they have good technology in place in addition to a hit game. Before Draw Something, my first experience with OMGPOP was about 4 years ago, when I got addicted to their Bomberman-inspired game, Baloono.

If I were in their shoes, I’d probably sell. But, I’d also enter negotiations with the full knowledge that there are many good acquisition partners and if I had to go it alone and not sell, I could and be quite successful at it.

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