(This article is part of the series The race to build the Facebook Gaming platform)
Company: Zynga Game Network
Location: San Francisco, CA
Funding: $10 million – Avalon Ventures (Rich Levandov), Foundry Ventures (Brad Feld), Union Square Ventures (Fred Wilson), Reid Hoffman (CEO of LinkedIn), Peter Thiel (Managing Partner of Clarium Capital), Pilot Group (Bob Pittman and Andy Russell)
Founders: Marc Pincus, Michael Luxton, Andrew Trader, and Eric Schiermeyer (2007)
More Developer Info: Zynga Developer Page
Inside Facebook: Mark, how did Zynga get started?
Mark Pincus: We originally just set out to build one game (Texas Hold ‘Em). It was getting a lot of traffic, and we were having trouble finding people who could sell it for us, so we decided to build our own CPA/CPI (cost per action/install) ad network and offer it to other people. We found that offering in-game incentives to influence our users’ behavior led to good results, and we found that we needed more product.
By the end of fall, we saw an amazing opportunity to build the largest distribution channel for games on the internet. Not only distribution, but also monetization. As game developers ourselves, we wanted an integrated channel. It’s becoming much harder to grow your user base these days, so you need another way to grow your base.
IF: What kind of games are you betting will work best on social platforms?
We see three options: 1) Creating short-lived, viral games (like Oregon Trail), 2) creating a repeat model and growing slowly (like Attack), 3) taking mature properties and making them more viral (like Scramble).
IF: What is your vision for the Zynga platform?
MP: We offer developers two things: 1) a cool social utility (the social bar) that makes you look bigger, and 2) more reach with terrific context. Our social bar shows what other games your friends are playing on the network, and we guarantee at minimum 1 click for every click that developers give to the network. And we’ve found that it’s not a zero-sum game – people like discovering what games their friends are playing, and overall clicks are up. Soon, we’ll be adding an API allowing developers to publish detailed game feeds. That will deliver even more traffic.
IF: Are developers concerned that you’re a publisher too?
MP: Building games has been a great way for us to learn new game models. We’re opening up our network, and think it’s a good deal for developers. Take EA – they’re a publisher/distributor, and that has allowed them to be one of the largest marketers as well. This actually isn’t new for the game industry – Pogo and Real produce and distribute games. They’re competing networks on one level and producing games for each other on another level.
IF: We’ve heard about some acquisitions you’ve made as well.
MP: We have acquired a couple of small game developers, primarily as ways to bring people on board. For example, Triumph: we saw brilliance in the way Ritesh Khanna was designing games. We acquired a couple from the UK who made Superheroes and have grown it organically. We also brought in CLZ, who were viral experts – we gained a lot of distribution, but no return use really – we just couldn’t buy the reach from RockYou or Slide.
IF: What do you think sets Zynga apart?
MP: Any good developer should try both options and go with what works better. Our numbers speak for themselves. We have 1 million daily active users that we grew organically, and now 1.4 million with the addition of CLZ. We’ve built a model where behaviorally our users are very interested in trying new stuff, and we’re able to remind users about your game through our network. And our dev app is very clean.
IM: Finally, do you have any advice for new media marketers evaluating social games?
MP: I believe that from a marketing perspective, social platforms are the third generation of the Internet. First we had the web, then we had SEO, now we have social platforms. Each time, we’ve reached a new realm of customer acquisition costs – and a new realm of category killers. My advice is to be early, use and test the medium for others do. Our most aggressive advertisers are small advertisers – they understand the power of being first…it will cost a lot more a year from now.