Zynga Mobile Makes Another Acquisition: Toronto's Five Mobile

Zynga's mobile division has been bulking up as of late. The company said today that it acquired yet another mobile development studio for an undisclosed sum: Toronto's Five Mobile. The company, which will become Zynga Toronto, is not a game developer. Instead, Five Mobile is more of a gun-for-hire that brands and media companies pay to build mobile apps. Previous clients include MapQuest, electronic music magazine XLR8R, Royal Caribbean International and TripIt. Zynga didn't really provide any specifics on what the team will work on, except to say that it will "focus on advancing multiple initiatives within Zynga mobile." The acquisition isn't entirely for talent either. Zynga said it would be acquiring intellectual property with the deal. Ameet Shah, Five Mobile's managing partner for sales and business development, will lead the studio and report back up to Zynga Mobile. With run-rates for certain top grossing iOS games exceeding $3 million a month, mobile is starting to become a meaningful revenue stream for Zynga even if it's still small relative to the $235 million in revenue the company saw in the first quarter of this year primarily from social games on the Facebook platform. To bolster its arsenal of talent, Zynga has made a series of mobile-related acquisitions in the past year, including Words With Friends-maker Newtoy, for which it paid $53.3 million in cash and stock. It also recently bought Wonderland Software to form a U.K.-based mobile studio. The company has also boosted spending on marketing contracts for its mobile apps in recent weeks, according to industry sources familiar with the matter. That, along with acquisitions, has helped put two Zynga titles in the iOS's top grossing 15. It has also been trying to work directly with carriers, with a recent deal with AT&T to provide special content for the mobile operator's branded shelf in Android Market. The company was very explicit in its IPO filing last week about the risks of not getting mobile right. "We have limited experience developing games for mobile platforms," the company said in its filing to the SEC last week. "We expect to devote substantial resources to the development of our mobile games, and our limited experience makes it difficult to know whether we will succeed in developing such games that appeal to paying players or advertisers." It considers its biggest competitors to be Electronic Arts, DeNA, Gameloft, Glu Mobile, and Rovio Mobile, according to the filing.

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Zynga Mobile Makes Another Acquisition: Toronto's Five Mobile

Kim-Mai Cutler

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