Zynga

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Zynga
Zynga-logo.jpg
Zynga.png
The front page of Zynga.com
Type Social Game Services Provider
Launch Date July 2007
Status Active
Product Line Games
Platform Social Networking Apps
iOS
Android
Website www.zynga.com

Zynga is a software development company that has created several popular social media games. Zynga's games can be played on PCs and Apple computers via online social media sites Facebook and Google+, as well as on mobile operating systems such as iOS 6 and Android. Zynga's mission statement is, "Connecting the world through games." It was reported that Zynga has over 240 million monthly active users, in over 175 different countries around the world [1]. The majority of the games Zynga offers are free to play; however, players have the option of using a credit card or a service such as PayPal to buy virtual currency to purchase in-game goods that enhance, extend, or accelerate gameplay [2]. One major ethical issue with Zynga is their tendency to 'steal' games, which they then profit off of.

History

Marc Pincus, CEO of Zynga.

Zynga was founded by Mark Pincus in 2007. He named the company after his American Bulldog, Zinga [3]. Zynga's headquarters are located in San Francisco, California. There are a total of 13 studios worldwide, including offices in Sunnyvale, Los Gatos, Los Angeles, Boston, Baltimore, Bangalore, Beijing, and Tokyo [4]. Other important "founding fathers" of Zynga include Eric Schiermeyer, Michael Luxton, Justin Waldron, Kyle Stewart, Scott Dale, Steve Schoettler, and Andrew Trader. Today, Zynga has over 2,800 full and part-time employees [5].

Zynga Poker was Zynga's first game and is still one of its most popular.

Games

The first game created by Zynga was Zynga Poker, a Texas Hold'em style of online poker gaming. Zynga currently holds 4 of the top leaderboard positions for most monthly active users on Facebook in its games: Cityville, Farmville, Texas Hold'em Poker, and Empires & Allies [6]. Zynga has 17 Facebook games as well as 15 games for mobile platforms. Some of Zynga's popular mobile games include Words With Friends, Scrabble With Friends, Hanging With Friends, Mafia Wars, and Zynga Slots. The popular OMGPOP game Draw Something was also added to the Zynga repertoire when OMGPOP was acquired by Zynga in 2012 [7].

Zynga's games are available to play on a number of global platforms, including Facebook, Google+, Zynga.com, Tencent (China's largest and most used Internet service portal), Apple iOS, and Google Android.

List of Zynga Games[8]

  • Ayakashi:Ghost Guild
  • Blackjack
  • Bubble Safari
  • CastleVille
  • Café World
  • ChefVille
  • Chess With Friends
  • CityVille
  • CityVille Holidaytown
  • CityVile
  • CityVille 2
  • Dream Heights
  • Dream Pethouse
  • Dream Zoo
  • Drop7
  • Empires & Allies
  • FarmVille
  • FarmVille 2
  • FarmVille Mobile
  • FishVille (This game was shut down on December 5, 2012)[9]
  • ForestVille (Will be shut down on December 30, 2012)[10]
  • Gems With Friends
  • Hanging With Friends
  • Hidden Chronicles
  • Indiana Jones Adventure World
  • Live Poker
  • Mafia Wars
  • Mafia Wars 2
  • Matching With Friends
  • Montopia (Will be shut down on December 21, 2012)[11]
  • Pathwords
  • PetVille
  • The Pioneer Trail (Formerly known as FrontierVille)[12]
  • Ruby Blast
  • Scramble with Friends
  • Sudoku
  • Super Bunny Breakout
  • The Ville
  • Treasure Isle (This game was shut down on December 5, 2012)[13]
  • Vampire Wars (This game was shut down on December 5, 2012)[14]
  • Vampires: Bloodlust
  • Word Twist
  • Words With Friends
  • Yakuza Lords
  • YoVille
  • Zombie Swipeout
  • Zynga Bingo
  • Zynga Elite Slots
  • Zynga Poker
  • Zynga Slingo
  • Zynga Slots

Revenue and Growth

Within just the last five years of being founded, Zynga has generated more than $1.5 billion in revenue. This is a huge amount of growth for a small-scale IPO. It is now trying to seize the leading share of a $9 billion virtual goods market that it believes could triple in the next five years. Since its start, the company has received a total of $519 million in funding from individuals and companies alike. Less than 10% of Zynga's revenue comes from advertising, while 36% comes from use outside the United States. On October 5, 2010 Bonfire Studios was acquired by Zynga, changing its name to Zynga Dallas [15]. In December 2011, Zynga began officially trading on NASDAQ under the ticker ZNGA. Shares for the company were initially set at $10, but in March 2012 they peaked to just under $15. However, Zynga's stock prices have dropped since and have been within the $2-$3 range for the past couple of months [16]. In October 2012 Zynga shut down its Boston office, letting go over one hundred employees [17].

Future

In 2012, Zynga's stock began to plummet. CEO Mark Pincus claims that due to change in Facebook's game promotion, Zynga's games have not been as popular as they once were [18]. Zynga officials said that Facebook is promoting newer games over older games, which decreased engagement on Zynga’s older titles. Zynga's older titles such as Farmville and Cityville are some of the most popular online games, and since their popularity has fallen, the company as a whole has suffered. Also, since Zynga acquired Draw Something from OMGPOP for $180 million, it has "underperformed" and the number of users has been rapidly decreasing. Pincus states that, "In the future, [users should] look for more hits on the desktop, mobile, and gambling games, as well as Zynga’s new third-party platform."[19]

Zynga Slots is one of Zynga's most popular gambling games.

Gambling

In late 2012, Zynga reached an agreement with Bwin.Party (an online gambling site based in London, England) to provide real-money online casino games. One announced game will be a FarmVille themed slots game. Currently, online real-money gambling is legal in the United Kingdom and much of Europe, but not the United States. The first games will be launched for users in the United Kingdom in early 2013 [20]. The two firms will be joining their pools of users under one platform. Barry Cottle, an executive at Zynga, explains the company's interest in this deal, “Partnering with an established leader like Bwin.Party is a strategic and prudent way for us to enter a key RMG market while giving local players the real money games they’ve been asking us for.”[21]

Zynga on Television

As a move to reduce Zynga's heavy dependence on Facebook, the company agreed to a deal with the technology firm Synacore Inc. Synacore provides web-TV services to nearly 50 cable, satellite, and telecommunication companies. With this partnership Zynga hopes to make game currency available to Synacore subscription service users. Starting in 2013, customers with web-TV's will be able to access many of Zynga's games from their television's home page [22].

Ethical Concerns

Advertising Scams

Zynga was at the center of a class action lawsuit following complaints that the developer had used dishonest advertising to generate huge revenues. More than $5 million is being sought from both Zynga and Facebook, the latter being the platform that Zynga’s advertisements went through [23]. Zynga’s cost-per-action ads gave users virtual currency for participating in various surveys, quizzes, or signing up for trial offers. It was alleged that some companies used Zynga’s cost-per-action ads illicitly, making unauthorized credit charges. It was found that some of the scams from Zynga lead players to download unwanted software and toolbars, along with this some users unknowingly sign up for memberships that would later appear on monthly phone bills [24]. In November 2009, CEO Mark Pincus admitted that scamming users was part of Zynga's original business model:
"I knew that I wanted to control my destiny, so I knew I needed revenues, right, fucking, now. Like I needed revenues now. So I funded the company myself but I did every horrible thing in the book too, just to get revenues right away. I mean we gave our users poker chips if they downloaded this Zwinky toolbar which was like, I don't know, I downloaded it once and couldn't get rid of it. *laughs* We did anything possible just to just get revenues so that we could grow and be a real business... So control your destiny. So that was a big lesson, controlling your business. So by the time we raised money we were profitable."[25]
Pincus later insisted that this method was only formerly used and has since vowed that the company’s games do not include scam offers anymore.

Employee Layoff

In October 2012, Zynga layed off 5% of its employees [26]. These layoffs took place at Zynga's office in Austin, Texas and pertained to employees who worked on The Ville and Bingo games. To try and hide this grim news, Zynga's CEO Mark Pincus was reported to have announced the layoffs during Apple's iPad Mini announcement event. In addition to the layoffs at Zynga's Austin branch, Zynga's Boston, Massachusetts office was also reported to close entirely [27]. This caused much grief among Zynga employees and was seen as cruel act on Pincus' behalf.

myFarm is on the left and FarmVille is on the right, notice any similarities?

Copyright and Patent Issues

Zynga has several issues dealing with copyrights and patents regarding their game releases. Zynga has been accused multiple times of copying different types of game concepts, or games in general, by simply renaming the title and tweaking some of its features. Such intellectual property controversies have resulted in lawsuits by game developers who claim their ideas have been stolen and tampered by Zynga without any reciprocation to the original creators. Recently, SocialApps sued Zynga for stealing their information on myFarm to create FarmVille. SocialApps signed a letter of agreement permitting Zynga access to their source code. Once Zynga had access, their phone lines went dead and they released their new version of FarmVille in June 2009 after myFarm was released in 2008 through Facebook [28]. In February 2012, Zynga released a game on iOS called Dream Heights which spurred controversy from NimbleBit, the developers of Tiny Tower. According to NimbleBit, Zynga copied their game and even attempted to buy out the company, but NimbleBit refused [29].

In June 2011, Zynga was on the opposite side of a lawsuit when they sued the Brazilian company Votsu. Zynga's complaint was, "Vostu has brazenly appropriated the copyright-protected aspects of Zynga’s games (as well as almost every other aspect of Zynga’s business) –with scant effort to mask their strategy– and then offered games virtually identical to Zynga’s games to prospective players in the United States and elsewhere."[30] Votsu retaliated, claiming that they had partnership talks and meetings with Zynga. They presented a counter suit, stating that Zynga cannot claim copyrights over everyday objects and places such as barns, farms, and chairs and recalls that Zynga too has copied designs from other companies in the past [31].

External Links

References

  1. ↑ CrunchBase: Zynga http://www.crunchbase.com/company/zynga
  2. ↑ Zynga inc. Company Profile http://www.hoovers.com/company-information/cs/company-profile.Zynga_Inc.43115865bec8017f.html/
  3. ↑ PrivCo's Archived Report for Zynga, Inc. http://www.privco.com/private-company/zynga-inc
  4. ↑ Zynga's website http://zynga.com/
  5. ↑ Number of Zynga Employees http://www.macroaxis.com/invest/ratio/ZNGA--Number_of_Employees
  6. ↑ Zynga’s Journey from Founding to IPO http://mashable.com/2011/07/01/zynga-ipo-infographic/
  7. ↑ Zynga Acquires OMGPOP http://www.forbes.com/sites/tomiogeron/2012/03/21/zynga-acquires-omgpop-maker-of-draw-something/
  8. ↑ Zynga.com list of games http://company.zynga.com/games/
  9. ↑ Zynga Game Closures http://www.gamesindustry.biz/articles/2012-11-05-zynga-begins-game-closures-with-fishville-and-treasure-isle
  10. ↑ ForestVille to be Shut Down http://support.zynga.com/article/forestville/ForestVille-to-be-shut-down-on-December-30-2012-en_US-1354221838825
  11. ↑ Official Montopia Facebook Update About Shutting Down http://www.facebook.com/montopia/posts/379922892082357
  12. ↑ FrontierVille changes name to The Pioneer Trail http://news.frontiervilleexpress.co.uk/2011/08/frontierville-renamed-pioneer-trail.html
  13. ↑ Zynga Game Closures http://www.gamesindustry.biz/articles/2012-11-05-zynga-begins-game-closures-with-fishville-and-treasure-isle
  14. ↑ Zynga Shuts Down Vampire Wars http://www.insidesocialgames.com/2012/11/07/zynga-confirms-vampire-wars-upcoming-closure/
  15. ↑ History of Zynga inc http://www.ripgamescenter.com/2011/09/history-of-zynga-inc-social-network.html
  16. ↑ How Zynga Grew http://venturebeat.com/2011/12/12/zynga-history/
  17. ↑ Zynga Shuts Down Boston Office http://techcrunch.com/2012/10/23/zynga-layoffs/
  18. ↑ Zynga's Revised Partnership with Facebook http://www.reuters.com/article/2012/11/30/us-zynga-facebook-idUSBRE8AS1FU20121130
  19. ↑ Why Zynga's Earnings Missed http://www.forbes.com/sites/tomiogeron/2012/07/25/why-zyngas-earnings-missed-and-what-it-plans-in-response
  20. ↑ Zynga Online Gambling Launch http://www.businessinsider.com/zynga-online-gambling-launch-2012-10
  21. ↑ Zynga Partners with Bwin.Party for Poker in the UK http://www.cardplayer.com/poker-news/14300-zynga-partners-with-bwin-party-for-poker-in-u-k
  22. ↑ Zynga to Bundle Games with Cable TV http://online.wsj.com/article/SB10001424127887324355904578159101376196088.html?mod=googlenews_wsj
  23. ↑ Zynga Faces Lawsuit Over Ad Scam http://www.develop-online.net/news/33341/Zynga-faces-lawsuit-over-ad-scam
  24. ↑ CNN: "The Facebook Games that Millions Love (and Hate)" http://www.cnn.com/2010/TECH/02/23/facebook.games/?hpt=Sbin
  25. ↑ Scamville: The Social Gaming Ecosystem Of Hell http://techcrunch.com/2009/11/06/zynga-scamville-mark-pinkus-faceboo/
  26. ↑ The Verge: "Zynga Lays Off Five Percent of Employees During Apple Event, Shutters Boston Studio" http://www.theverge.com/2012/10/23/3544176/zynga-reportedly-lays-off-100-employees-during-apples-event-shutters
  27. ↑ TechCrunch: "Zynga Just Shut Down Boston Office, Layed Off 100+ Employees From the Ville and Bingo Teams in Austin" http://techcrunch.com/2012/10/23/zynga-layoffs/
  28. ↑ Zynga Steals Code for FarmVille from SocialApps' myFarm http://www.eurogamer.net/articles/2011-07-19-socialapps-farmville-stole-myfarm-code
  29. ↑ Tiny Tower Developers Call Out Zynga For Copying Their Game http://techcrunch.com/2012/01/24/tiny-tower-developers-call-out-zynga-for-their-look-alike-game/
  30. ↑ Zynga Sues Vostu http://techcrunch.com/2011/06/16/war-zynga-sues-the-hell-out-of-brazilian-clone-vostu/
  31. ↑ Zynga is Hit with Counter Lawsuit from Votsu http://bits.blogs.nytimes.com/2011/07/20/zynga-is-hit-with-countersuit-over-game-designs/

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