Media & Entertainment

The Legal Tussle Between Zynga And The Cityville GM That Left For Kixeye Heats Up

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Kixeye CEO Will Harbin is lashing out at Zynga for suing the vice president of product that the gaming startup poached earlier this month. Shortly after former Cityville general manager Alan Patmore left for Kixeye, Zynga sued him for theft of trade secrets and breach of contract.

Zynga says that Patmore stored more than 760 documents from his work computer in Dropbox before his last day. Zynga says these files contained design documents for unreleased titles, future monetization plans and compensation information on employees.

The suit names Patmore and while Kixeye isn’t a defendant, Harbin has decided to be more vocal today about Zynga’s suit. Update: Zynga obtained a court order today (embedded below) that prevents Patmore from destroying any of the company’s data, asks for a forensic analysis of his computers, iPhone and Dropbox account. He will also be deposed. Kixeye isn’t doing anything additionally legal at the moment:

“Zynga is burning to the ground and bleeding top talent and instead of trying to fix the problems — better work environment and better products — they are resorting to the only profit center that has ever really worked for them: their legal department.

It is simply another case of Zynga vindictively persecuting a former employee as an individual. Given their financial situation it all feels pretty desperate.

Our games have little in common with the ones that Zynga is known for. We make synchronous, combat strategy games. They make asynchronous cow clicking games. We have 2 of the top 7 highest grossing games on Facebook. Why on earth would we want to emulate a business that has seen a 75% decline in share price since their debut? According to their S1 their games average $.06 ARPDAU. Our games generate up to 20x that. You do the math.”

OK, for background: Kixeye is a midcore social game developer. Midcore titles have smaller player bases, but they monetize better. They tend to target male audiences instead of the stereotypical middle-aged female demographic that Zynga and other casual gaming companies go after. That’s why Harbin says that Kixeye’s games make up to 20 times as much as the 6 cents that Zynga earns on average per player per day.

Zynga, in turn, has criticized Kixeye for being ranked #34 in terms of monthly active users on the Facebook platform and for never having released a top 10 game (as ranked by player base) in the suit against Patmore. Kixeye has said it’s on track to do more than $100 million in revenues this year, while Zynga said that it expects to see $1.085 billion to $1.1 billion in bookings this year.

However, Zynga has recently made moves that suggest that it is considering midcore titles, which is a huge departure from the way it has done mass-market, casual titles. Zynga recently bought a developer named A Bit Lucky and framed it as a deal that would break the company into midcore gaming.

Around the same time, Kixeye poached Patmore, who oversaw one of Zynga’s most lucrative titles Cityville, to become the company’s vice president of product. Just to give you an idea of how important Cityville has been to Zynga, the title made 13 percent of Zynga’s online game revenue in the second quarter of this year, according to an SEC filing. Do the math and multiple that out against the company $291.5 million in quarterly online game revenue, and you can infer that Cityville alone made at least $38 million that quarter.

Zynga has also been bleeding senior talent throughout the last several months, as the company’s stock has declined to a current $2.50 from a $13-14 range in March. Some of the executives that left Zynga came over from EA and were close to former COO John Schappert, who resigned earlier this year.

At the same time, Kixeye has not been shy to rub dirt in rivals’ faces. Not only do they have an irreverent hiring campaign running in the local San Francisco BART metro system with laser-shooting unicorns, they made a viral video ad that jabs competitors in a not-so-subtle way. In the video below, a candidate interviews at three semi-fictitious gaming companies. Based on the logo, it’s not really hard to guess which one satirizes Zynga and its CEO Mark Pincus.

So it’s no wonder that Zynga, which hasn’t been shy to pursue litigation with former employees, to go after Patmore. Zynga had previously sued four former employees who left for Playdom, which was then acquired by Disney. Zynga later settled and one employee was even sentenced to jail time, although they didn’t actually serve that time.

Here’s a copy of the suit against Patmore:

Zynga also obtained a court order today that asks for a forensic analysis of his home computer, his Kixeye computer, his iPhone and his Dropbox account. There is also a restraining order preventing destruction of any Zynga property.

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