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[Gamesbriefers] How would you save Zynga?

By on October 26, 2012
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Question:

It was recently reported that Zynga’s market value was less than the value of its cash holdings and the property it owns in San Francisco. If you were suddenly asked to replace Mark Pincus, what would you do to revive the company’s fortunes, how long would it take and what would be your metric of success?


Answers:

Dylan Collins Executive chairman at Fight my Monster

Take it private.

A transitioning business model (social to mobile) which at the best of times wasn’t really understood by Wall St has no place being on the public markets. You’re just asking to get the shit kicked out of you.

Take it private (it’s cheap), buy a couple of really good mobile companies for cash and stock. And then sell it or refloat it (if you have to) in 2-3 years when things have stabilised. Or when gambling has been legalised 🙂

-It lets you take advantage of private money (plenty available)
-It lets you do the gambling stuff behind closed doors
-It gives equity stability which is critical for hiring people who’ll stay longer than a couple of weeks


Ian Marsh Developer at Nimblebit

I think Zynga needs to be a much leaner machine, and that means laying off a big chunk of their workforce unfortunately. You don’t need thousands of people to work on a handful of casual games. I’d keep the best creative talent there and put them at the heads of small teams to come up with new and original games. Once a hit is recognized I suppose you could put the full weight of Zynga’s marketing and analytical teams behind it. I’d also take a page from DENA and make mobile the primary focus  for their new publishing and social platform. I’d launch games on iOS and Android first and only port them to the web or other platforms if they prove to be successful games. I’d also probably take the company private again to prevent stock fluctuations from de-motivating employees or providing the wrong kind of motivations for working there. I think Zynga could actually be salvaged with the right person at the helm.


Harry Holmwood Consultant at Heldhand

Yes, definitely – take it private.  Zynga is going to continue to be in transition for the next couple of years, as is the entire industry. The market isn’t the place for it.
They’re doing fine in mobile, and that’s where the bigger opportunity for them lies.  It’s also a huge opportunity for them to squander silly money on user acquisition and ego-driven acquisitions, if they’re not careful.  Gambling is a big potential growth area too.

Plus… they have a massive amount of cash and expertise.  They need to start attracting more of the spending crowd, and they can do that by applying the expertise they have (in accessibility and metrics) to that crowd via more compelling  in depth games (without dropping the ball on their casual crowd).  Despite the huge success of League of Legends, World of Tanks etc, these are still products which have huge ‘convenience walls’ (if that phrase catches on, please remember I just invented it and credit me in your book 🙂  ) – massive client downloads, tough learning curves etc – areas where Zynga excels.

It needs 18-24 months to refocus, invest and reap the rewards.  Hopefully the general market makes more sense by then too.
Measures of success:

  1. Cashflow positive
  2. Successful entry into two or more of – ‘harder core games’ (need a better word), gambling, off-Facebook gaming, well-monetized mobile
  3. No longer being seen as a dirty word
  4. Key creative and exec staff retained, incentivised and happy.

Andy Payne Founder of Mastertronic

If I was asked to do the job I would go down this route:-

  • Privatise the company ASAP
  • Focus completely on mobile platforms
  • Review operational costs – spend 3 months understanding the people factor – decide on what is an operational overhead and what we could afford
  • hold on to 1 or 2 cash cow games
  • Identify a rising star or commission one fast
  • Ditch the dogs
  • Rebrand – not rename but that needs massive work
  • Go on a charm offensive
  • Stop copying others
  • Be original

Success =

  • getting into profit (if not already) within 12 months
  • be a proper player in mobile and known for it
  • generate cash although that comes with 1 or should do
  • have a team who care about each other, their players and the industry in general
  • issue Acid to all staff if 1-4 does not worked

Oscar Clark Evangelist at Applifier

I agree with all of the other statements about returning to private ownership and refocusing the business.  For me I would only add that I believe that they need also to transition to a marketing led strategy rather than sales/new user acquisition company.

This means putting at the heart of the business the goal to identify and satisfy consumer needs.

That to me means aspiring to make the best possible games and investing in their underlying brand, which I believe is tarnished.

They already have a lot of data to help them do this, but I feel they need to look below the surface of that data means and focus on maximising the entertainment value to the customer – not just maximising the income to Zynga from the whales.

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  • Jason Garber

    ps. forgot to say: less than a year. Stock would come at around 15 – 20 dollars after that.

  • Jason Garber

    Poker. Fulltilt poker was bought by Pokerstars for over 500 million dollars. You do not pay such a large amount unless there is a plan. In Nevada there are (as far as I know) three or four players who are getting an Online Poker license.
    In the UK Gamesys has launched real money games on Facebook. Zynga Poker has something like 40 million players worldwide for their current poker game (much more than any other pokersite atm)
    Zynga needs to use these daily plays on FB and see FB as a platform for their best performing game with real money. Learn the trade in Europe where non government run casino licences are possible and will teach them the trade. Be prepared for when the US online license becomes available for them and run that market immediately with knowledge and experience. They already had a top exec from some poker site join them.
    Public or not, they need to make money. This is the way imho. They could be the leader on FB, the largest platform in the world with realmoney poker (or other games). Let FB take a piece of the action and bob is your uncle.

  • I would also take it private. Cut down on the size of the company. And start to actually make good games. And instead of trying to cram out as much money from the users as possible in as a short time as possible make the users actually like to play the games and get them to pay because of that instead.

    Let the designers do what they are good at, design good games and not totally rely on metrics.