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Zynga has announced the purchase of UK game-maker NaturalMotion for $527 million.

Oxford-based NaturalMotion has had a string of mobile game hits, such as CSR Racing and Clumsy Ninja. Its purchase gives Zynga an entry into the lucrative mobile games market.

As news of the deal emerged, Zynga also reported a loss of $25 million for the fourth quarter.

It said it would trim its workforce by 15% – equivalent to about 314 jobs.

“We believe that bringing Zynga and NaturalMotion together is the right step at the right time,” said Zynga chief executive Don Mattrick in a statement.

“Our acquisition of NaturalMotion will allow us to significantly expand our creative pipeline, accelerate our mobile growth and bring next-generation technology and tools to Zynga that we believe will fast-track our ability to deliver more hit games.”

In a note to employees, Don Mattrick highlighted that with the acquisition, Zynga will now have five top gaming brands: Farmville, Casino, Words with friends, CSR Racing and Clumsy Ninja in the “people” category.

Zynga has announced the purchase of UK game-maker NaturalMotion for $527 million

Zynga has announced the purchase of UK game-maker NaturalMotion for $527 million

NaturalMotion’s Clumsy Ninja has been rated more than 78,000 times in the US and UK version of Apple’s App Store – the vast majority of them positive.

Don Mattrick also told employees the acquisition gives Zynga access to NaturalMotion’s Euphoria technology, which helps create realistic motion for characters in movies and games.

The takeover of the 13-year-old firm is being interpreted by some as Don Mattrick’s bet on character-driven intellectual property.

As part of the terms co-founder of NaturalMotion, Torsten Reil, will stay on and report to Don Mattick, and new games will continue to be released under the NaturalMotion brand.

Zynga has struggled to replicate the success it has had with desktop games Farmville and Mafia Wars and has been unable to generate new hits on smartphones.

This is seen as a crucial weakness, as more and more consumers play games on their phones.

NaturalMotion is the biggest acquisition for the firm, and it comes after Zynga bought OMGPOP for $180 million in 2012, only to see that firm’s flagship game, Draw Something, shed users.

In June, Zynga announced it would cut 18% of its workforce and then a month later, it was announced that Don Mattrick would take over from the company’s founder Mark Pincus.

The $25million loss actually represents good news for Zynga: it is 43% lower than the same period last year.

Microsoft’s latest games console Xbox One is set to be released on November 22.

Xbox One will initially be available in 13 countries – UK, US, Ireland, Canada, Germany, Spain, France, Italy, Austria, Brazil, Mexico, Australia and New Zealand.

Remaining markets will follow in early 2014, Microsoft confirmed.

The timing of the launch will mean it beats close rival Sony’s PlayStation 4 to the shelves in much of the world by one week.

The exception is North America, where Sony’s console will be available on November 15.

The releases set up the first new console war since 2006, the last time both firms had fresh gaming machines on the market.

Xbox’s marketing vice-president, Yusuf Mehdi, announced the firm’s rollout plans in a statement.

“The culmination of many years of listening to you, our fans, developing innovative technology, and partnering with the best game and entertainment partners in the industry has brought us to this point,” he said.

Xbox One is set to be released on November 22

Xbox One is set to be released on November 22

“There is still a lot more work to do, but the teams are making excellent progress and are focused on launch.”

Yusuf Mehdi confirmed that the console recently entered full production in preparation for the launch. Pre-orders had sold out faster than any of the company’s previous gaming products, he said.

He also confirmed that the console’s CPU had been upgraded by around 10% – from 1.6 Ghz to 1.75 Ghz.

It has been an uneasy few months for Microsoft in the run-up to this major launch.

In July, Microsoft lost its head of interactive entertainment, Don Mattrick, to social gaming company Zynga.

Don Mattrick left at a time when Microsoft was still bruised by a damaging performance at E3, the biggest gaming event in the calendar.

Microsoft had announced that the Xbox One would be more expensive than the PlayStation 4, and controversy surrounded various decisions regarding the firm’s policy on playing pre-owned games on the system.

In a dramatic U-turn a week later, Microsoft said it would drop heavily criticized restrictions on the console, was seen as a somewhat embarrassing exercise in damage limitation.

But that will all ultimately be forgotten by gamers once the consoles go on sale, and the Xbox One’s games line-up looks to set it up in good shape for the crucial first Christmas.

In particular, big-name exclusive titles and additional content on best-sellers such as EA’s FIFA football series are likely to drive sales.

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Microsoft has made an U-turn over its decision to impose restrictions on pre-owned titles on its new Xbox One console.

Microsoft had said it would restrict the free trade of pre-owned games, and that an internet connection was required to play all titles.

But following gamers’ anger, Microsoft said it would drop the policies.

Microsoft interactive president Don Mattrick said the company had “heard loud and clear” from its customers.

“You told us how much you loved the flexibility you have today with games delivered on disc,” Don Mattrick said in a statement posted online.

“The ability to lend, share, and resell these games at your discretion is of incredible importance to you. Also important to you is the freedom to play offline, for any length of time, anywhere in the world.”

Microsoft has made an U-turn over its decision to impose restrictions on pre-owned titles on its new Xbox One console

Microsoft has made an U-turn over its decision to impose restrictions on pre-owned titles on its new Xbox One console

The statement, which was for some time inaccessible due to heavy traffic, went on to backtrack fully on the controversial aspects of their DRM – digital rights management – plans:

  • “An internet connection will not be required to play offline Xbox One games – after a one-time system set-up with a new Xbox One, you can play any disc based game without ever connecting online again. There is no 24-hour connection requirement and you can take your Xbox One anywhere you want and play your games, just like on Xbox 360.
  • “Trade-in, lend, resell, gift, and rent disc based games just like you do today – there will be no limitations to using and sharing games, it will work just as it does today on Xbox 360.”

The rules apply to games bought as physical discs only, and do not affect games downloaded via the online Xbox store.

“While we believe that the majority of people will play games online and access the cloud for both games and entertainment, we will give consumers the choice of both physical and digital content,” Don Mattrick said.

“We have listened and we have heard loud and clear from your feedback that you want the best of both worlds.”

However, there will be something of a trade-off for gamers.

Microsoft had planned to allow customers to “trade” downloaded games online in exchange for money off new titles. The change of stance means that gamers will no longer be able to do this – something gamers may regret in the future, one analyst suggested.

Questions over the handling of pre-owned games was an unexpected talking point at last week’s E3 conference – the largest games industry event in the calendar.

Sony took the opportunity during its press conference to make a direct attack on Microsoft’s policy.

“PS4 will not impose any new restrictions on your use of PS4 game discs,” said Jack Tretton, boss of Sony Computer Entertainment America, drawing cheers from some attendees.

For Microsoft, it means a second high-profile U-turn in short succession. Last month, it told Windows 8 users that it would be bringing back the iconic “Start” button to its operating system, having previously dropped it from its redesign.

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