Zynga to Sell Its San Francisco Headquarters

SAN FRANCISCO—Games developer Zynga Inc. is putting its once-lustrous symbol of corporate perks on the block.

The San Francisco games developer, which rose to prominence for social games such as Farmville and Words with Friends, plans to put its headquarters up for sale.

Zynga purchased the office building at 699 Eighth St. in San Francisco's Design District for $228 million in 2012 after leasing part of the space. The land, structure and fixtures were last assessed at over $238 million, according to city records.

The seven-story headquarters opened in 2011 and included a gym, a basketball court, a bar, a candy shop, a Winnebago and a cafeteria serving three gourmet meals a day. Perks included pet insurance, Blue Bottle coffee drinks served by a barista, fitness classes and acupuncture. Employees were encouraged to take their dogs to work and were given unlimited vacation.

But the gaming company's meteoric rise, propelled by a viral marketing relationship with Facebook in its early days, came crashing down in the years after its 2011 initial public offering. Shares of Zynga, whose stock priced at $10 at its IPO, traded on Tuesday at $2.

The company declined to comment beyond confirming that the building would be put up for sale this quarter. The company plans to lease space in the building from its next owner. Layoffs in May brought the company's employees to about 1,600, less than half its peak of 3,400 in 2012.

The company plans to launch 10 games this year, according to a regulatory filing. That includes two titles, Dawn of Titans and CSR Racing 2, that were originally scheduled for a 2015 launch. The company saw its monthly active users fall 30% in the fourth quarter, when it had no big game releases.

Zynga offered a reserved outlook in its fourth-quarter report this month, when it said it expected an adjusted loss of a penny per share, or for the company to break even. The company reported a loss of $46.9 million for that quarter.

By 2011, Zynga had raised more than $845 million in capital in its four years of operation. Its backers included Andreessen Horowitz, Foundry Group, Kleiner Perkins Caufield & Byers and Union Square Ventures.

Zynga Chief Executive Don Mattrick resigned in April, and founder Mark Pincus took back the reins at the top spot.

(END) Dow Jones Newswires

February 24, 2016 13:15 ET (18:15 GMT)

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