Yes, I would pay $200mm for a game that nets $250k/day or $91.25mm/year. Assuming Zynga does nothing but maintain the revenue, it will make back it's investment in a little over 2 years. How many investments opportunities are out there that net you a ~40% yield!? Of course there is risk with an investment like this, but this is after all, their core business and they are probably very good at mitigating those risks.
Ha, right. And in related news, at its height, the Pet Rock was netting a million dollars a day. At that rate, why didn't somebody pay $700 million to acquire the company? They could have made their money back in two years.
Don't know anything about the Pet Rock, and you can poke fun all you want, but it doesn't change the fact that this title has significant revenue that is more likely to go up than down under Zynga in at least the medium term due to reasons such as:
- Cross promotion
- platform leverage
- historical performance of similar games
- and all of this operating in a market segment (mobile gaming) that is exploding not contracting.
