OMGPOP's $200m write-down froze Zynga's board out of a $400m Supercell deal
Summary
Zynga founder Mark Pincus disclosed a 2012 handshake agreement to buy Supercell for $400m in cash, which his own board rejected.
The board's refusal came directly after Zynga wrote down its $200m OMGPOP and Draw Something acquisition as a failure.
Supercell posted $500m in net profit the following year, and SoftBank valued the studio at $3bn just over a year later when it bought a 51% stake.
"I had the chance to buy the winning hand" - Mark Pincus, founder, Zynga
01
Board vetoes the deal, citing unproven M&A management
Pincus held a handshake agreement with Supercell CEO Ilkka Paananen to acquire the studio for $400m in cash in 2012.
Zynga's board rejected the deal, telling Pincus to first prove he could manage the studios he had already bought.
Hay Day was outperforming Zynga's own farm games at the time, and Clash of Clans had just launched and was climbing the charts.
"They were grumpy and they said, until you prove you can manage what you have, we don't want you to buy anything else" - Mark Pincus, founder, Zynga
02
Voting control existed on paper, not in practice
Pincus still held voting control of Zynga in 2012 and could have forced the acquisition through over the board's objection.
His lawyer advised that exercising it meant firing the entire board, replacing it with his own appointees, and risking a personal lawsuit.
Pincus later learned that lawyer worked for the company, not for him personally, undercutting the advice he acted on.
No board member broke ranks against the rejection, a pattern Pincus calls groupthink he did not want to fight alongside Wall Street.
"He said, you could do this, but to exercise your voting control, you'd have to fire everyone on the board, replace them with your own people, and then you would be sued personally" - Mark Pincus, founder, Zynga
03
The same board approved a weaker target a year later
After Pincus stepped down as CEO, his successor sought board approval for a $550m acquisition of a studio with no revenue and no hit games.
The figure and timing match Zynga's 2014 purchase of NaturalMotion under then-CEO Don Mattrick, reported at the time as a $527m deal.
The board approved the larger, unproven acquisition without the resistance it applied to the profitable, market-leading Supercell.
The contrast shows the board's caution in 2012 tracked Pincus's authority and the OMGPOP scar, not the underlying quality of the target.
"And my board said, great, we believe in you" - Mark Pincus, founder, Zynga
04
Pincus's own post-mortem shifts the blame from the board to himself
Pincus says the strategic frameworks he later credits for Zynga's turnaround, including Proven Better New and expert witnesses, already existed in 2012.
Asked what changed between his 2015 return and today, he pointed to time and reflection, not a new method.
He calls the 2015 return defensive, saying he spent $800m of Zynga's roughly $1.4bn cash pile buying back stock near $2.20 a share while playing defense rather than leading from strength.
Take-Two later acquired Zynga at close to $10 a share, making the buyback profitable but not the transformative bet Supercell would have been.
"Mark 2012 and Mark 2015 thought he was dealt a bad hand. Mark 2025 thinks it was a great hand. I just wasn't ready to play it" - Mark Pincus, founder, Zynga
What this means
For Investors & VC: Add founder-control override mechanics and counsel independence to governance diligence on founder-led targets.
For Publishers & Developers: Prioritize acquirers without recent acquisition write-downs when shopping a studio for sale.
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