Zynga Buys Conduit Labs; Social Gaming Giant’s Footprint Now Includes Boston

[Updated, see page 2] San Francisco-based Zynga, continuing the acquisition spree enabled by the massive success of its social games for Facebook, MySpace, and the Apple iPhone, has acquired Conduit Labs, the three-year-old music gaming company based in Cambridge, MA.

Zynga announced the acquisition in a press release. Conduit, headquartered in the Barron Building at 614 Massachusetts Avenue in Central Square, will now be known as “Zynga Boston” and its team will be “immediately integrated into Zynga’s workforce,” according to the announcement. Zynga isn’t saying how much it paid for the startup.

Conduit Labs was formed in 2007 by Nabeel Hyatt, formerly chief operating officer at MIT spinoff Ambient Devices. Backed by $8.5 million in venture financing from Charles River Ventures in Waltham, MA, and Prism VentureWorks of Westwood, MA, the startup first gained notoriety for Loudcrowd, a casual gaming community launched to the public in March 2009. In Loudcrowd, players created customized avatars and competed for points in animated dance games requiring a combination of listening skills and eye-hand coordination.

Loudcrowd demonstrated Conduit’s programming chops, and even attracted the attention of Massachusetts Governor Deval Patrick, who played a few rounds during a visit to Conduit’s original Cambridge Innovation Center home. But the game predated the huge boom in social games facilitated by Facebook’s growth, and failed to gain a large user base. Conduit shut down Loudcrowd on July 29 of this year to focus on its two Facebook game titles, Music Pets and Super Dance (the latter of which drew heavily on art styles and game play developed for Loudcrowd).

Now those two titles will become part of Zynga’s existing Facebook lineup, which includes the breakout hits FarmVille and Mafia Wars as well as a number of lesser-known titles, such as Cafe World, Fashion Wars, FishVille, FrontierVille, PetVille, Pirates, Special Forces, Treasure Isle, Vampire Wars, and YoVille.

In a March 2009 interview with Xconomy, Conduit’s Hyatt said that Loudcrowd, which was designed in part as a vehicle for music promotion and sales, represented “10 percent or less” of the potential for the company’s social games. “It became very obvious very early on that the potential for this product was that it was a multi-billion-dollar company, if we executed it right,” Hyatt said. He compared Loudcrowd to MTV, which, he said, “had a worse path to market and a worse monetization model than we have. This thing is ours to screw up.”

But as it became clear that Facebook, with its built-in viral user acquisition mechanism, would be a better platform for social games than the open Web, Conduit pivoted. Its Facebook games have done fairly well—Super Dance has 483,000 monthly active users, and Music Pets has 362,000. But the startup never approached the levels of success achieved by … Next Page »

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