Supercell was almost acquired by Zynga for $400 million in 2012, according to founder and former CEO Mark Pincus.
In a recent interview on the Deconstructor of Fun podcast, Pincus stated that he and Supercell CEO and co-founder Ilkka Paananen agreed to an all-cash acquisition of Supercell by Zynga.
The deal did not proceed because, according to Pincus, Zynga’s board stated, “until you prove you can manage what you have, we don’t want to buy anything else.”
Zynga previously acquired Draw Something developer OMGPop for $180 million in 2013. The studio closed less than 18 months later.
“I had bought OMGPop, and that ended up being a failure,” said Pincus. “We only wasted $200 million. Now, $400 million. I had the chance to buy the winning hand.”
“I went to my lawyer, who I realised later was Zynga’s lawyer, not mine. And 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 partially’.”
Pincus continued: “I wish I had more confidence as a founder and CEO to go against the grain and fire my board for being idiots. I didn’t want to fight them or Wall Street, and I went along with it to the detriment of everybody. And a year later, Supercell made $500 million in net profit.”
According to Pincus, a year after he stepped down as CEO, his successor proposed acquiring a company with “no revenues, no hit games” for $550 million. “And my board said, ‘Great, we believe in you.'”
As noted by MobileGamer.biz, Don Mattrick left Xbox in 2013 to become Zynga’s CEO after Pincus’ departure, and the company later acquired NaturalMotion for $527 million.
Pincus returned to Zynga in 2015, when the company held $1 billion in foreign cash. Upon his return, he authorised $800 million in stock buybacks, reduced the workforce by 18%, and narrowed the company’s game portfolio.
“There were so many other good investments that I could have [made] at the time. And didn’t, because I was playing defence. I was licking wounds. I was not my best CEO self,” said Pincus.
Zynga made several acquisitions under Frank Gibeau, who later became CEO after Pincus stepped down for a second time. However, Pincus believed Zynga had the potential to become a much larger company.
“We had the chance to build the biggest game company in the world,” he said. “There’s no game companies with any f***ing vision today. There wasn’t then. Tencent is the only big game company. There still is not a single Western world game company with a market cap over $100 billion. And I thought by now there’d be five or six. There’s just no f***ing vision in the industry. There’s no innovation. They’re all just playing defence.”