After market close today, Zynga announced that it was acquiring Benchmark portfolio company NaturalMotion for $527MM in cash and stock. Congratulations to Torsten Reil, the remarkable CEO of NaturalMotion, and to his entire team. Congratulations as well to Don Mattrick, CEO of Zynga, and his team.
I first met Torsten in late 2011. NaturalMotion had already been around for years as a licensor of extremely powerful 3D animation technology to the video game business (their Euphoria and Morpheme animation engines power core games like Grand Theft Auto). Torsten had a bold plan — to make his core 3D technologies proprietary for mobile devices and use them to create stunning new mobile games that pushed the boundaries of graphics and animation on mobile platforms.
We were very fortunate that Torsten allowed us to invest in this new endeavor. Torsten and I share a belief that quality is the ultimate customer acquisition tool, and it has been a real privilege to get to work with him as he created a new publishing business based on this principle. Hit titles like CSR Racing, CSR Classics, and Clumsy Ninja validated Torsten’s approach — they drew huge audiences without huge marketing budgets or the incentivized install chicanery that passes for customer acquisition in most mobile game companies. Torsten fundamentally understood that the mobile game consumer was hungry for innovation, and in an era of stagnating creativity — where cynical clones of hit games like Clash of Clans proliferate — NaturalMotion’s strategy remains highly differentiated.
I am incredibly thankful for the team’s hard work and extraordinary execution. Torsten, Barclay Deeming, Liz Wyle, Adam Whittaker, Jason Avent, and their teams deserve tremendous credit for this. I am also thankful for the opportunity to have worked with a great board of directors including Mark Evans and Michael Pennington.
It is really exciting to see the combination of these two great companies. I’ve known Zynga’s new CEO Don Mattrick since the late 90’s when he ran EA studios and I ran Activision studios, and he is one of the great executives in the video game business. NaturalMotion will provide Don with a fantastic slate of mobile products (both new, innovative ones, as well as sequels of their current hits). Combined with Zynga’s reach, social networking expertise, and advanced audience measurement tools, NaturalMotion and Zynga should be a very potent combination.
Despite industry cycles, Benchmark has continued to make investments in games companies, backing top entrepreneurs like Torsten Reil, Brandon Beck at Riot Games (acquired by Tencent), and David Perry at Gaikai (acquired by Sony). If you include my company, JAMDAT, which Benchmark backed, our early-stage investments in games companies have produced over $2 billion in gross exits in the last several years. We continue to look for great entrepreneurs to guide the next wave of innovation in gaming.