Zynga Buys Music Pets Developer Conduit Labs

In its fifth acquisition of the year, Zynga has bought Conduit Labs, the developer of Super Dance and Music Pets. Fittingly, Conduit will become Zynga’s fifth American office, taking the name Zynga Boston.

The Conduit acquisition looks quite similar to Zynga’s buyout of Challenge Games in June, with that company being renamed Zynga Austin. Challenge, like Conduit, started with good prospects and interesting ideas, but didn’t produce any huge hits on Facebook.

It’s fairly clear that Zynga bought Challenge for its talent, not its games. In less than two months, Challenge’s games have declined precipitously; its biggest, Warstorm, went from 560,170 monthly active users on June 2nd to 152,261 today.

Conduit may have been anticipating this acquisition for a while. Its first effort, the music site Loudcrowd, was shut down on July 29th, according to its homepage. Music Pets has evidently received little promotion, already having fallen from an April high of 1.2 million users to 362,053 today. That title was also the last released by Conduit, all the way back in February. [Update: Conduit writes on its company blog that both Music Pets and Super Dance will be shut down.]

However, it seems unlikely that all of Conduit’s efforts to date will go to waste. The company’s games stood out for their music-focused design, which incorporated licensed content from some some of the biggest names in pop.

Licensing music from the record majors isn’t easy, but Conduit put special effort into hiring former music industry execs and building connections. The company also has several designers who worked on Rock Band.

Could Zynga use this talent? You bet. While Conduit’s titles didn’t become particularly large, Zynga won’t have missed the example of Nightclub City, another music-heavy game, which was built by MyTown creator Booyah. That game has now reached 6.5 million monthly active users, growth that CEO Keith Lee told us came more from word of mouth between music fans than advertising.

Zynga’s pace of new releases this year has been molasses slow, with only FrontierVille, Treasure Isle, and the ill-fated Poker Blitz appearing since January. But we’re fairly certain that it won’t have its new studios sitting on their hands, either.

One more interesting detail about Conduit: its CEO, Nabeel Hyatt, founded [ed.: correction, see comments below] was a founding member of a cross-promotion effort for small social game developers called Applifier this May. We hear that Applifier has become quite successful — so much so that Hyatt relinquished his leadership role to Jussi Laakkonen, another founder and now CEO, a couple months ago. Hyatt could also bring some interesting perspective on promotion to Zynga.

Before Playdom was bought by Disney, we got into the habit of listing out its previous acquisitions each time it made a new one, to help keep track. Here’s the 2010 list for Zynga, excluding Conduit:

For the Conduit Labs acquisition, the investors were Charles River Ventures, Prism VentureWorks, and possibly other, unknown investors. Conduit had raised $8.5 million since its founding in 2007.