Zynga founder and CEO Mark Pincus expects
mobile gaming to grow, but believes Web-based gaming will still be crucial. Facebook, he said at the AllThingsD conference this morning, remains central to Zynga's platform and distribution. Facebook, the company's first platform, was the early accelerator for its games and is still really important in part because it has both a social stack and an app stack, he told conference host Kara Swisher.
For distribution, it has been significant, but there are other alternatives. Building a great experience matters, as does how well it is integrated into people's lives. Facebook has been a great platform on the Web and has the potential to be on mobile, as well. Pincus was clear to mention that desktop and Web use remains big. Just as Facebook was the accelerator for play on the Web, mobile fills that role for play in more places. The majority of play, though, is still on the desktop, often from company employees during office hours.
The conversation started with a discussion on valuation and the stock market. Zynga went public six months ago, but it had been preparing to go public for two years prior to that by setting quarterly goals and having a quarterly all-hands meeting. Going public wasn't a huge transition for Zynga, Pincus explained. He believes the recent companies that have gone public are "awesome companies" with great business models, but the market is busy trying to figure out how to value them.
Zynga began with the thought there was room in the gaming market and a new business model could monetize it. Reach, retention, and revenues were the principles on which Pincus built Zynga. In the early stages, he placed 40 percent of the focus on each of the first two, and just 20 percent on revenues, but that balanced out over time. Mobile is still in the early stages, with games such as Words with Friends and Draw Something, though he expects mobile usage to grow rapidly and revenue to follow.
Pincus agrees that part of the gaming market is a "hits" market, with some games like Farmville having a very intense period of use. However, Zynga is good at releasing new content to extend the life of such games. Many other games, like Poker, are "evergreen."
Acquisitions are not in Zynga's business model, although it has made some. When the company bought Words with Friends, it had less than two million daily active users. Zynga thought the product could grow, and soon it was more than five times as popular and was building extensions. He was attracted to Draw Something because of its focus on user-generated content. Success comes by integrating a product with Zynga's platform, rolling it out to other countries, and extending the brand. It's crucial to keep a product line strong over a period of years, so it is too early for Pincus to tell if it is a success.
Zynga aims to be best operator of mobile social games and needs to have the best platform and network to do that. The company recently announced opening its platform, network, and APIs to other game makers. "We want to be a game network much like Xbox Live," Pincus said, but he isn't interested in getting into the console market.
"Innovation for us comes in lots of small places and ways," Pincus said. The company focuses on making it easier to play and filling in the gaps. Zynga, in Pincus' eyes, is a disruptor.
Pincus aspires to be a great CEO, not just a product entrepreneur. He learns things as a CEO every week. Though he's good at planning products, he realizes he must learn on the job how to manage, turning to other entrepreneurs like Intuit's Scott Cook for advice.
When asked to compare different international markets, he asserted Asia is ahead of the U.S. in converting "players to payers," but the U.S. is ahead in things like game mechanics. While the U.S is now focusing a lot on mobile games, countries in Europe are more focused on the PC. "Real-money" gaming could be very big, but is dependent on regulation changes, Pincus said.
