"This originated in an online game called Warcraft, where a map designer misspelled 'owned.' When the computer beat a player, it was supposed to say, so-and-so 'has been owned.'
Instead, it said, so-and-so 'has been pwned.'
It basically means 'to own' or to be dominated by an opponent or situation, especially by some god-like or computer-like force.
'Man, I rock at my job, but I still got a bad evaluation. I was pwned.'" OR "That team totally pwned us."
Thanks for the info.