Zynga, You Didn't Build That

Zynga (Nasdsaq: ZNGA) went shopping yesterday. Let's hope that it doesn't end up as badly as the last time that the company turned heads in making an acquisition.

The social gaming leader is buying A Bit Lucky, a small 20-person developer that is best known for Lucky Train and Lucky Space -- two interactive games that were introduced through Facebook (NAS: FB) but are no longer available.

Buzz is building for A Bit Lucky's next game. Solstice Arena will be a more intricate multiplayer experience than the virtual worlds that players typically gravitate to on Facebook. The game will be played across various platforms including computers, tablets, and smartphones. It's a game that's goes beyond drawing a picture, planting seeds, or turning letter tiles into words.

A Bit Lucky's bar-raising features are clearly what attracted Zynga to this deal. It recognizes that gamers are getting more finicky about casual games that have been the company's bread-and-butter business in the past. The potential of mid-core gaming -- a tweener niche straddling the realms of hardcore console titles and simpler social building apps -- is an opportunity for Zynga to reach a new layer of gamers.

Terms of the deal haven't been made public, but sources tell Bloomberg that Zynga will pay between $20 million and $25 million for the company. It's far less than what Zynga has paid in the past to buy the parents of Words With Friends and Draw Something, and that's probably a good thing.

Zynga still hasn't been able to live down the $180 million that it paid for OMGPop earlier this year. The developer's Pictionary knockoff Draw Something was the smartphone app flavor of the moment, but the purchase seemed desperate.

It proved to be Zynga's "jump the shark" moment. Investors began to fret that Zynga would have to perpetually buy out hot app developers that threatened its throne. Zynga may have come up with plenty of organic hits, but some of its more notable successes came at a price.

The stock began to slip. A simple $180 million purchase led to $8 billion in market cap obliterated six months later, with several managers bolting this summer. It obviously won't fall that far this time. It's only a little more than $2 billion away from zero.

Sooner or later, Zynga's going to need the organic hits to prove that it can do more than merely buy its way out of its shortcomings.

Playing to win
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