Casual gaming behemoth Zynga hasn’t exactly made a bright start to the new financial year. Not only has the owner of Farmville, Draw Something and Words With Friends seen its share price crash by 70%, it is now facing two allegations of unethical conduct, both of which could have significant legal consequences.
As reported by The Verge, a range of senior officers at the company, including co-founder Mark Pincus, have been hit with a lawsuit accusing them of insider trading. Key investors cashed out to the tune of US$515m in April. Regular shareholders were not permitted to sell their stakes until May, by which time the share price had commenced its steep decline. The company is yet to formally respond to the allegations.
If that isn’t enough to cope with, social gaming rival EA has announced that it will sue Zynga for copyright infringement. According to EA, Zynga’s 2012 life sim The Ville “copied the original and distinctive expressive elements” of its own 2011 Facebook game The Sims Social. Zynga general counsel Reggie Davis told Game Informer that the lawsuit demonstrates EA’s “lack of understanding of basic copyright principles.”
This represents arguably the most challenging period in the five year history of a company that, until now, has taken all before it.