Zynga: the rise and fall of Social Networking browser based games

Zynga is a company founded by Mark Pincus in April of 2007 named after his dog. Their first game released was Texas Hold’Em Poker otherwise known as Zynga Poker which simulated playing poker in a Social Gaming environment. Since it is attached to a Social networking site, which in this case was initially just on Facebook. It had elements that allowed for interaction among players; these included lobbies, leaderboards, and included ways wherein players can send and receive gifts from one another.

                At first it was developing games solely for Facebook but they eventually branched out to other Social networking sites then finally on to the mobile platform. Their initial success was succeeded by a string of popular titles that included the likes of Farm Ville, Mafia Wars, and City Ville. With Farmville being the most successful. Within two months of its official release in 2009, the game had more than one million daily active users and by the end of that same year, up to 20% of all Facebook users were playing FarmVille.

                The company went public in December of 2011 at $10 which was the biggest IPO since Google’s public offering way back in 2004. It acquired a series of companies to augment its intellectual property and invested heavily in trying to move away from Facebook. The company took a gamble moving away from the Social Networking giant and tried to shift its game offerings on mobile, this did not pay off too well.

                At around the same time, a competitor arose in the form of King Digital Entertainment’s Candy Crush Saga which cannibalized a huge portion of Zynga’s user base. Candy Crush took a lot of the market share which up to that point was dominated by Zynga. In effect, Zynga’s stock price began to nosedive until it hit its rock bottom price of $2.09 in November of 2012.

                There are various speculations on how a company as influential as Zynga fell from grace. It can be attributed to a number of factors, first off is its rough relation with Facebook which had a huge portion of its user base, although the two companies eventually signed a partnership deal the initial damage has been done. Second is mismanagement and acquisition of companies instead of focusing to enhance its homegrown Intellectual Properties. Zynga went on a buying spree for companies it did not necessarily need. Finally, emerging competition from the likes of Candy Crush and the emerging mobile platform market and Zynga’s failed transition all contributed to its stock plummeting. Whether Zynga can rise to the same level of relevance in the Social Gaming market it had once dominated remains to be seen.

Sources:
http://arstechnica.com/business/2013/09/how-zynga-went-from-social-gaming-powerhouse-to-has-been/
http://www.cnet.com/news/the-quick-rise-and-fall-of-zynga/
http://www.statista.com/chart/1308/the-rise-and-fall-of-zyngas-gaming-empire/
http://www.valuewalk.com/2014/05/zynga-inc-rise-and-fall-infographic/
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Brendon Martin Borgonia