Zynga Nets $150MM Investment, Is Turning Japanese

Posted on July 30, 2010


Turning Japanese, I think I'm turning Japanese, I really think so.....

MediaPost-Drawing further attention to the white-hot social gaming sector, Zynga on Thursday said it raised $150 million from Japanese wireless carrier Softbank. The partners also announced plans to develop and distribute social games in Japan via a new Zynga Japan joint venture.

Along with the obvious opportunities to expand its user-base, the Asian enterprise will allow Zynga to “gain insights from the Japanese market,” said Mark Pincus, founder and CEO of Zynga.

Based in Tokyo, Zynga Japan will attempt to tap into the country’s renowned passion for gaming and technology, while leveraging Softbank’s mobile and Web technology to produce new social games. “We share the same vision as Zynga in social games and look forward to working together to create a social game powerhouse,” Masayoshi Son, chairman and CEO of Softbank, said in a statement.

San Francisco-based Zynga creates games like “FarmVille” and “Mafia Wars,” which have thrived on social networks like Facebook, as well as among early mobile app adopters.

While Zynga has taken issue with Facebook for limiting the ways it can contact users through the social net’s notification system, the two companies recently reached a deal to partner for at least the next five years. By all accounts, Zynga is trying to decrease its dependence on Facebook, however. In May, it announced a partnership with Yahoo to offer its games throughout the Web portal’s network including the home page, Yahoo Games and Yahoo Mail.

Softbank is well known for investing in technology companies, including a 40% stake in Yahoo Japan.
Driven largely by the popularity of gaming on Facebook, the social gaming market is witnessing mega-deals almost daily.

Just this week, News Corp.’s IGN Entertainment debuted a social gaming network dubbed MyIGN. Also this week, reports emerged that Google is in talks with the makers of popular online games, including Zynga, to create a social network to rival Facebook.

Citing unnamed sources, The Wall Street Journal on Wednesday reported that the search giant is in discussions with Electronic Arts’ Playfish and Zynga, and had been with Playdom.

There were also reports two weeks ago that Google has invested at least $100 million in Zynga, which has benefited from Facebook users’ love for gaming more than any other company.

Walt Disney, meanwhile, just agreed to acquire two-year-old social gaming site Playdom for $563 million, which followed Electronic Arts’ acquisition of Playfish for a reported $300 million late last year.