Bloomberg News

Zynga Unveils Network Enabling Gaming Across Sites, Devices

June 26, 2012

Zynga Inc. (ZNGA:US) introduced a social- neworking service designed to make it easier for users to play online games across different mobile devices and existing sites.

Zynga With Friends will enable interactive game-playing that spans Zynga’s own site and Facebook Inc. (FB:US), the largest social-networking service, as well Apple Inc. (AAPL:US) and Google Inc. (GOOG:US) operating systems that run on various computers and smartphones, Zynga said at an event in San Francisco.

Chief Executive Officer Mark Pincus is using acquisitions and product development to reach new users on the Web and mobile devices, where more games are being played. Partnering with outside developers may also help lessen Zynga’s reliance on Facebook, which accounted for 92 percent of revenue in the first quarter.

“The real goal is just to get more players, and the fact is that there are people who will play games who aren’t on Facebook,” said Michael Pachter, an analyst at Wedbush Securities Inc. “It’s smart not to be wedded to Facebook.”

The Zynga With Friends service will let game developers add social features, such as chatting, multiplayer support, social connections and a feed that shows players what their friends have been playing.

‘Symbiotic Relationship’

In an interview, Pincus denied that Zynga is trying to distance itself from Facebook in mobile. The ties between the companies will only strengthen as more people play games on Facebook via such devices, he said.

“Where we go, Facebook goes,” Pincus said today at his company’s headquarters. “The same kind of symbiotic relationship that we have on the Web will happen on mobile.”

San Francisco-based Zynga fell 5 percent to $5.77 at the close in New York. The stock has fallen 39 percent this year.

Zynga also announced partnerships that let outside developers, including 50 Cubes, Majesco Entertainment Co. (COOL:US) and Polarium, make games for Zynga.com.

Zynga plans to help its partners generate revenue by bringing more users to their games, providing services that let them sell virtual goods and giving them a cut from the sales of ads shown beside their applications, the company said.

‘The Ville’

Executives at Zynga showed clips from unreleased games, including “The Ville,” an app in which users build and decorate a home; “ChefVille,” a culinary game; and a new casino program, “Zynga Elite Slots.”

Six new games were offered in the first quarter of this year, helping Zynga grow to 182 million monthly users, up 25 percent from the same period a year earlier.

The company expects to spend hundreds of millions of dollars acquiring game developers over the next three to five years, Pincus told Bloomberg in an interview earlier this year.

Zynga owns the five most popular games played on Facebook, according to AppData. “Texas HoldEm Poker,” with 33.7 million users, and “CityVille,” with 29.8 million users, top the social gaming charts.

“Bubble Safari,” which the company built and introduced in May, is the third-most popular game on Facebook with 26 million users, according to AppData. “Draw Something,” which Zynga acquired through its March purchase of OMGPop, is in fourth with 22.2 million users.

Facebook takes a cut of virtual goods sold in Zynga games, such as crops and tractor equipment in “FarmVille.” While Zynga is the dominant provider of games on Facebook, it faces significantly more competition on smartphones and tablets.

Menlo Park, California-based Facebook has said its revenue may be negatively affected by users accessing the site on mobile devices rather than personal computers, since the company’s ability to make money off mobile users is unproven.

To contact the reporter on this story: Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • ZNGA
    (Zynga Inc)
    • $2.42 USD
    • 0.13
    • 5.37%
  • FB
    (Facebook Inc)
    • $77.82 USD
    • 0.87
    • 1.12%
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