Softbank Investment In Zynga Appears Strategic
According to a report from BusinessWeek yesterday evening, Zynga has raised an additional $147 million from Softbank. More importantly, the investment helps Zynga gain distribution. As Douglas MacMillan and Yoshinori Eki write, “Softbank and Zynga have discussed distributing and jointly promoting games through Softbank’s mobile-phone service in Japan and other countries”.
Zynga most recently raised $180 million from DST partners, and with substantial profitability, the company doesn’t really need additional cash. While it was not stated, we’d assume that the investment was accepted for strategic purposes and was possibly used to partially cash out some of the initial investors, but that’s all speculation. Zynga is the leader of social gaming by a significant margin, even despite recent declines in daily active user numbers.
While Zynga is not publicly announcing the recent investment, it looks like a rational move as the company is rapidly looking for new growth channels. Unfortunately there are few details about the investment but we’ll be sure to post updates if we learn anything more.
