Zynga Inc said on Thursday it is buying NaturalMotion, the company behind the hit mobile games CSR Racing and Clumsy Ninja, while cutting 15 percent of its workforce in a turnaround effort.
The company moved up the release of its fourth-quarter earnings results by a full week to coincide with the announcement of the US$527 million acquisition and the job cuts.
Investors sent its shares up US$0.63, or 18 percent, to US$4.19 in after-hours trading.
Zynga has been cutting jobs and posting losses as game players increasingly turn to smartphones and tablets.
The company’s biggest hits, including FarmVille and Mafia Wars, have mostly been played on desktop and laptop computers.
By buying NaturalMotion, Zynga hopes to bolster its mobile games as its core business deteriorates.
King.com, the maker of the popular Candy Crush Saga, has replaced Zynga as the No. 1 maker of games played on Facebook.
However, Zynga said it plans to release FarmVille onto mobile devices in the second quarter, which it expects will help it reverse a long slide in audience and “bookings” — a precursor to revenue — at least for the remainder of the year.
“We anticipate that [the first quarter] will be the bottom,” CEO Don Mattrick said in a conference call with investors.
Mattrick left Microsoft’s Xbox division in July to take over as Zynga ousted founder Mark Pincus.
NaturalMotion will give Zynga exclusive access to its groundbreaking game engine, called Euphoria, on mobile platforms.
The engine is what powers the human-like motions of the character in Clumsy Ninja, who can be hoisted, tickled and flung around with a few finger taps and swipes.
Zynga expects the latest job cuts to save US$33 million to US$35 million this year.
The company has already made significant cuts to its workforce. It has about 2,100 employees, down from a peak of 3,300 in 2012.
The San Francisco-based company’s loss in the October-December quarter came to US$25.2 million, or US$0.03 per share. That was down from a loss of US$48.6 million, or US$0.06 per share, in the same months the year before.
Analysts expected a loss of US$0.04 per share. Sales plunged 43 percent to US$176.4 million, worse than the US$183.5 million expected by analysts polled by FactSet.
The NaturalMotion acquisition is expected to add US$0.01 per share to Zynga’s adjusted profit this year.
Zynga said on Thursday that it expects an adjusted profit of US$0.01 to US$0.03 per share this year, above the US$0.04 per share loss analysts were forecasting.