Friday, August 17, 2012

Nokia Corporation (NYSE:NOK) Draws Something with Zynga Inc (ZNGA) in a New Deal

Zynga Inc (NASDAQ:ZNGA) may be having problems with its long-time ally, Facebook Inc (NASDAQ:FB), but it is now forging new alliances and expanding the scope of its alliances with existing partners.

Finnish mobile phones maker Nokia Corporation (ADR)(NYSE:NOK) has extended its deal with the game developer to add its new game `Draw Something' and Zynga Poker for its Asha range of feature phones along with all the Nokia Series 40 range.

Announcing the deal, Nokia said that the games will start rolling out on its phones from the third quarter of this year and will cover 100 million users.

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Nokia has lost ground in the smartphones segment to Samsung and Apple but it still has a strong line-up of feature phones that is popular at the mid and lower levels of the segment.

For both companies it is mutually beneficial. For Nokia it is another way for the company to ensure stickiness amongst its users as they, especially the youth segment, look at the mobile as a form of entertainment.

For Zynga, which has seen dwindling revenues, this is a good time to grow its user-base internationally.

Both the games from Zynga will be free to download from the Nokia Store while users can also purchase in-game credits. The company is also expecting the Zynga games to drive more people to purchase the Asha series, especially in the developing and emerging markets, where these phones are sold at attractively low prices.

Incidentally these are the first Zynga games that will be available on Nokia's feature phones.

Zynga had acquired `Draw Something' for $180 million in April 2012 but has not been able to make much headway with the game that has seen falling user numbers.

Shares of NOK jumped 4% to $2.98, while shares of ZNGA are flat.

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