If there’s one company that turned the 21st century social media phenomenon into a cash cow, it has to be Zynga. The San Francisco-based social gaming company has harnessed the social reach of Facebook along with the market reach of Android and the iPhone to become a $1.1 billion company in online game development. Its most popular games, such as FarmVille and CitiVille, along with ChefVille and the recent Zynga Poker, are played by an estimated 265 million social gamers online as of January 2013. About 80% of its revenue comes from Facebook.
Real World Problems + Marketing Lessons
But all is not well with Zynga. After it went public on NASDAQ in December 2011 with an initial public offering of $10 per share, Zynga’s stock prices plummeted to as low as $2 per share in 2012. Investors seem to have become wary about the company’s shaky business model, as its revenue fell short of analysts. forecasts already in the second quarter of 2012.
So what went wrong and what Zynga marketing lessons can we take from this? First of all, it now appears that social gaming has a short, fluid retention factor where casual gamers soon lose interest in gaming. The players in his Farmville have decreased by the millions every month. Studies have shown that social games retain only 38% of their users after one month and 14% before the sixth month. This makes it important for a social gaming company like Zynga to introduce new games relentlessly. In fact, Zynga’s strategy has been to put out more game titles to catch dropouts from older games. The company has become a Pacman swallowing small social game developers. Unfortunately, investors are not impressed. While newer and presumably more exciting social game titles may promise more markets, Zynga is really just moving its social media from one title to another and has yet to impress investors that its value is worth investing in. market.
But perhaps the most serious problem is that Zynga does not own its main distribution channel: Facebook. Not owning the platform their customers use to play their games has put Zynga at a long-term disadvantage. You are at 안전놀이터 the mercy of the leader of the social network. The tumultuous relationship between Zynga and Facebook is well known. No one knows what will happen to Zynga once its contract with Facebook expires in a month. It may be a bit late in the game that Zynga has made a gaming presence with other social networking sites like Google+. Spreading your online gaming strength through more social networking sites is something you should have done sooner. As it is, Zynga has pretty much put all of its proverbial eggs in one basket. That’s like having only one store to sell your products.