FarmVille developer Zynga is planting its next bumper crop in Asia with the acquisition of Chinese social-gaming company XPD Media.
Zynga, a gaming giant with 230 million monthly active users, is looking to expand its growth beyond Facebook, where its FarmVille holds the rank as the most popular game, the company announced Thursday. Getting a foothold in China with its massive population and love for online games, is expected to yield a bountiful harvest for the privately held company that has an estimated valuation of a whopping $5 billion.
Zynga's arrival in China comes at a good time. The company earlier this month entered into a five-year strategic partnership with Facebook, which is reportedly planning to set up shop in China, according to news site Sina. The Chinese publication notes, however, that Facebook can gain entry into the country by only one of two routes -- a joint-venture or merger with a Chinese company. Zynga is taking the M&A route.
Staggering Growth in Farming Games
Additionally, as VentureBeat notes, online farm games, in particular, are posting staggering growth in China with an estimated 28 million to 30 million daily active users. Social-gaming company Five Minutes is the market leader in the region, with its Happy Farm owning the largest plot of active users.
With its XPD Media acquisition, Zynga will not only get an office in Beijing but also a staff of 40 that will be immediately added to the young company. XPD's CEO Robin Chan will become Zynga's general manager of Asian business development.
"As the largest Internet market in the world, China is in the vanguard for virtual goods-based gaming innovation," says Robert Goldberg, Zynga's vice president of corporate development, in a statement. "We expect our new office in Beijing and the incredible talent in the local market to play a strategic role in our mission to create the best social-gaming experiences worldwide."
The terms of the deal were not disclosed. However, according to peHUB, Zynga will be snapping up a company that has received $2 million in venture funding from True Ventures and Pilot Group, which is a drop in the bucket considering the $240 million that it's landed from its own investors. One of Zynga's investors includes Digital Sky Technologies' Yuri Milner, which DailyFinance's Sam Gustin notes has been jacking up the deal-making costs in Silicon Valley.
Let the games begin . . .
Take the first steps to building your portfolio.View Course »