Zynga Stock Surges on Disney Deal

Zynga Inc. (ZNGA) has signed a multi-year deal with Walt Disney Co. (DIS) to develop and publish a new “Star Wars” mobile game.

As part of the agreement, the video game maker will be responsible for operating the live service of "Star Wars: Commander," a free-to-play real-time strategy game that Disney launched in 2014. The deal also includes the option to create a second “Star Wars” game.

In a press release, Zynga described the licensing agreement as another important breakthrough in its strategic bid to create new forever franchises and grow its live services. The San Francisco-based company’s shares surged 7.49% in after-hours trading.

"Star Wars is one of the most iconic franchises in the world and has engaged generations of fans for decades," Frank Gibeau, Zynga’s CEO, said in the press release. “As game makers and moviegoers, we're huge fans of Star Wars and are excited to create new experiences for players that bring this beloved brand to life. We look forward to extending the reach of the Star Wars universe and developing a new mobile game that entertains players for years to come and has the potential to be a future forever franchise for Zynga."

NaturalMotion Acquisition Comes Good

Zynga confirmed that its NaturalMotion studios will oversee the development of Star Wars mobile games. The U.K.-based software company, known for titles such as “CSR Racing,” has so far struggled to live up to expectations since Zynga purchased it for $527 million in 2014.

The acquisition formed part of the San Francisco-based company’s strategy to beef up its portfolio of smartphone games after users began ditching Facebook Inc. (FB) desktop games to play on mobile devices. (See also: How Facebook Is Hurting Video Game Stocks.)

That goal appears to finally be paying off after a difficult few years. Earlier this month, Zynga forecast third-quarter bookings, a measure of future revenues, ahead of Wall Street estimates, driven by the popularity of  “Merge Dragons” and other newly acquired smartphone games. (See also: Small Cap Zynga on Fire After Key Acquisition.)