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Template:Infobox dot-com company


Zynga (Template:IPA-en) is a Web 2.0-based social network game developer located in San Francisco, California, United States.[1] The company develops browser-based games that work both stand-alone and as application widgets on social networking websites such as Facebook and MySpace.

History[edit | edit source]

Zynga was founded in July 2007 by Mark Pincus, Michael Luxton, Eric Schiermeyer, Justin Waldron, Andrew Trader, and Steve Schoettler.[2] They received USD $29 million in venture finance from several firms, led by Kleiner Perkins Caufield & Byers in July 2008, at which time they appointed former Electronic Arts Chief Creative Officer Bing Gordon to the board.[3] At that time, they also bought YoVille, a large virtual world social network game.[3] According to their website, as of December 2009, they had 60 million unique daily active users.[4]

The company name '"Zynga" comes from an English bulldog once owned by Mark Pincus.[5]

As of February 2010, Zynga has over 750 employees.[6]

On 17 February 2010, Zynga opened Zynga India in Bangalore, the company’s first office outside the United States.[7]

On 18 March 2010, Zynga confirmed that they will open a second international office in Ireland.[8]

On 7 May 2010, Michael Arrington of TechCrunch reported that Zynga was threatening to leave Facebook altogether in the wake of Facebook's requiring exclusive use of Facebook credits for monetization in applications.[9] After Facebook negotiations for having Zynga host its games solely on Facebook fell through, Facebook retaliated by shutting off notifications for several Zynga games, including FarmVille.[9] Plans have surfaced for Zynga to distance itself from Facebook by creating a new "Zynga Live" network, to be called ZLive.[10] As of June 2010, FarmVille had 18 million fewer Facebook players than its March 2010 peak of 85 million.[11]

On 3 June 2010, Zynga acquired Challenge Games.[12]

Business model[edit | edit source]

Zynga is supported in two manners: Via direct credit card payments and partner businesses.[13][14] Several Zynga games require an "Energy" characteristic to play. Engaging in "Missions", a core feature of many games, consumes a certain amount of energy. After expending energy, it slowly replenishes to the character's maximum limit. This can take minutes or several hours (energy replenishes whether or not players are logged into the game). After energy is replenished, players can engage in additional missions. Waiting for energy to replenish is a significant limiting factor in the games. Their support mechanisms take advantage of this.

Prior to November 2009, Zynga games linked to offers from a number of partners. Players could accept credit card offers, take surveys or buy services from Zynga's partners in order to obtain game credits, which would allow them to replenish their character's energy or receive premium currency that could be exchanged for other various virtual goods.

Players may also purchase game credits directly from Zynga via credit card[13] or PayPal. From within the game, players can purchase the points for a fee: USD$5.00 for 21 game credits, for example.

In March 2010 Zynga started selling prepaid cards for virtual currency at more than 12,800 stores across the US.[15]

Platinum Purchase Program[edit | edit source]

In September 2010, Gawker reported that Zynga had set up a "Platinum Purchase Program" allowing members to purchase virtual currency in amounts over $500 at favorable rates by making a payment via wire transfer. In contrast, the normal maximum purchase limits are $50 to $200.[16] As with other social game companies, Zynga depends on a small core of large spenders, known within the industry as "whales", for a large part of its income.[17] Ryan Tate, author of the post, speculated that the program was a way for gaming addicts to feed their obsession, and compared the secrecy of the program to the secrecy of drug deals.[16]

Viability[edit | edit source]

Many journalists have questioned the viability of Zynga's business model. Ray Valdes questioned the long-term prospects for Zynga, saying that it would be difficult for the company to make new titles to replace old ones whose novelty is fading.[18] In December 2009, Tadhg Kelly, writing for Gamasutra, said that Zynga was at the "end of the beginning," noting that Zynga's business model is dependent on Facebook continuing to operate in the same manner and users continuing to expect the same quality of games, among others. Kelly also compared Zynga to Atari, which also churned out large numbers of simple games prior to the North American video game crash of 1983 and further claimed that Zynga's approach of creating similar clones of popular games would be impossible for deeper games.[19] Tom Bollich, a former Zynga investor, said that it is impossible to make a cheap viral game, and that retaining customers is difficult.[20]

Controversies[edit | edit source]


In its first years of existence, Zynga has been criticized on various fronts.

Games[edit | edit source]

Zynga's games in general have been the subject of criticism.

Spam concerns[edit | edit source]

Many of Zynga's games revolve around interacting with other players for in-game benefits. Many non-players have notably complained about such communications created by those games that appear to them as "spammy." Peter Jamison described Zynga's communications as a "deluge" of "unwanted gifts or requests for neighborly 'help.'"[20] Facebook groups created to express displeasure regarding overexposure of Zynga's games attracted millions of members.[13] As a result of this, Facebook modified their application developers policy to prevent applications from sending messages to news feeds of friends or submitting updates to the notifications bar.[21] Because of this, Zynga threatened to sever all ties to Facebook due to the "loss of users" they claim it caused.[22]

Game quality[edit | edit source]

Georgia Tech professor Ian Bogost criticized Zynga's apathy towards game aesthetics, comparing that apathy to "strip-mining."[20]

Replication of existing games[edit | edit source]

Zynga has been accused several times of copying game concepts of popular games by competing developers.[23][24]

The launch of Mafia Wars sparked a lawsuit from the makers of Mob Wars.[25] An attorney for Psycho Monkey, the creators of Mob Wars, said that in making Mafia Wars, Zynga "copied virtually every important aspect of the game."[26] The suit was settled out of court for $7–9 million.[27]

Ars Technica noted that Zynga's Cafe World and Playfish's Restaurant City were "nearly identical"; Cafe World was released six months after Restaurant City. Its gameplay, design, graphics, avatars, and even in-game items are almost identical to the ones in Restaurant City. Many players who have played Restaurant City and Cafe World have noticed the extreme similarities between both games.[28] In addition, journalists have remarked that Zynga's FarmVille is similar to Farm Town, with Peter Jamison calling it "uncannily similar."[20][26]

Other companies have responded by copying Zynga's games as well. Playfish, publisher of Pet Society (a game similar to Zynga's Petville), announced the creation of Poker Rivals to rival Zynga Poker.[24] Playfish then launched a game called Gangster City, which is similar to Mafia Wars.

In September 2010, SF Weekly reported that an employee recalled Mark Pincus advising him to "copy what [Zynga's competitors] do and do it until you get their numbers."[20]

Zynga founder Mark Pincus has dismissed the criticisms, saying that competing video game makers have always released similar titles for each genre of game.[13] The managing director of Lightspeed Venture Partners said that creating similar competing games has "always been part of the game industry."[26]

Scam ads[edit | edit source]

Through 2009 Zynga made money from lead generation advertising schemes, whereby game participants would earn game points by signing up for featured credit cards or video-rental services. These were criticized as being less cost-effective than simply buying game points, and in some cases, being outright scams that would download unwanted software or unwittingly sign up for a recurring subscription.[13] One ad signed up players for subscriptions to expensive and unwanted text-messaging services.[14]

On October 31, 2009, Michael Arrington of TechCrunch said that Zynga intentionally worked with scam advertisers, and that lead generation made up a third of Zynga's revenue.[29] Arrington also alleged that Facebook was complicit in this.[30] On November 2, 2009, CEO Mark Pincus announced a reform in its offers: Tatto Media, a major offer provider that enrolled users into recurring cell phone subscriptions, would be banned, all mobile offers would be removed, and offer providers would be required to pre-screen offers.[31]

Arrington continued to question Pincus' role in the scams, republishing a video of a speech by Pincus.[32] In the speech, Pincus said:


In response, Pincus noted that after offering the Zwinky toolbar, his team of ten decided to remove it since it was a "painful experience."[33]

Several days after the Techcrunch story, Zynga's most recent Facebook game FishVille, was temporarily taken offline by Facebook on claim of advertising violations. According to Zynga, Fishville had 875,000 users within two days of launch. A release from Facebook on its reasons for taking the game offline read that "FishVille will remain suspended until Facebook is satisfied that Zynga demonstrates compliance with Facebook restrictions — as well as Zynga’s own restrictions — on the ads it offers users."[34] FishVille was later un-suspended at midnight November 9–10.[35]

Several suits were filed against Zynga for promoting such offers,[36][37] including a class-action lawsuit in the United States District Court for the Northern District of California for violation of the Unfair competition law and the Consumers Legal Remedies Act, after the lead plaintiff's credit card was billed more than $200 for offers she completed to receive YoVille currency.[38][39][40]

Pincus later said that he had been too eager to increase company revenues through advertising, and that operating in reactive mode by taking down ads only after receiving complaints had not worked. The company removed all ads for a time, relying only on direct purchase of game currency, then began reintroducing third party ads only after they had been screened.[13]

Other criticism[edit | edit source]

In September 2009 Zynga was threatened with legal action by Nissan for using their trademarks in the game Street Racing. Zynga subsequently renamed and changed the thumbnail images of all cars that were branded Nissan and Infiniti to "Sindats" and "Fujis" with the thumbnails changed.[41] At the time they also renamed and redesigned automobiles depicted as being made by GM, Ferrari, Lamborghini, Saab, and others.

In late May 2010, the Norwegian Consumer Council filed a complaint to the Data Inspectorate regarding breaches of the Data Protection Act.[42]

In August 2010, the San Francisco city attorney's office complained about the firm's guerrilla marketing campaign for its "Mafia Wars" game that pasted fake money on city sidewalks, calling it "vandalism".[43]

Funding[edit | edit source]

In December 2009, Russia's Digital Sky Technologies bought a $180 million share of Zynga.[44]

In 2010, a combined $300 million from Softbank and Google were invested in Zynga.[14]

Games[edit | edit source]

Games Discontinued[edit | edit source]

Zynga.org[edit | edit source]

Zynga started a charity sister company, Zynga.org, in charge of incorporating charitable contributions into its games.

For example, since at least October 2009, through its game FarmVille, Zynga offered special sugar beets which customers can purchase with real-world money. Proceeds from the donation go to two Haiti-based charities: FATEM.org and FONKOZE.org. By October 20, the sugar beet promotion had raised $427,000 and was expected to raise $2 million by year's end.[45][46] Zynga is using tie-ins via three of its top games to raise money for relief of the 2010 Haiti earthquake.[47] Zynga offers special bulldogs in YoVille, the proceeds going to the San Francisco SPCA.[48][49]

References[edit | edit source]

  1. "Contact Zynga." Zynga. Retrieved on February 23, 2010.
  2. About Zynga from Zynga
  3. 3.0 3.1 "Zynga Completes $29 Million Financing, Led by Kleiner Perkins Caufield & Byers" press release from Zynga's blog (July 23rd, 2008)
  4. Zynga's front page with user statistics
  5. The Facebook games that millions love (and hate). Cable News Network. Turner Broadcasting System, Inc. (February 23, 2010). Retrieved on August 26, 2010
  6. Zynga - Company Profile on LinkedIn
  7. Zynga Opens First International Office in India. Zynga (2010-02-17). Retrieved on 2010-02-17
  8. Mulligan, John (2010-03-18). Irish base for US online gaming giant to boost our 'smart economy'. The Irish Independent. Retrieved on 2010-03-18
  9. 9.0 9.1 Arrington, Michael (2010-05-07). Zynga Gunning up (and Lawyering up) for War Against Facebook with Zynga Live. TechCrunch. Retrieved on 8 May 2010
  10. Arrington, Michael (2010-05-08). Zynga’s Struggle For Independence: Bailing On Tagged, ZLive To Launch Soon?. TechCrunch. Retrieved on 9 May 2010
  11. FarmVille Sheds Another 9 Million Users In Latest Facebook Rankings
  12. Zynga acquires Challenge Games; expands social gaming footprint.
  13. 13.0 13.1 13.2 13.3 13.4 13.5 Doug Gross (2010-02-23). "The Facebook games that millions love (and hate)". CNN. http://www.cnn.com/2010/TECH/02/23/facebook.games/?hpt=Sbin. Retrieved 2010-04-03. 
  14. 14.0 14.1 14.2 Miguel Helft (July 24, 2010). "Will Zynga Become the Google of Games?". New York Times. http://www.nytimes.com/2010/07/25/business/25zynga.html?_r=1&src=busln&pagewanted=all. Retrieved 2010-07-24. "In addition, Zynga’s $520 million in financing includes a recent infusion of $300 million through two, roughly equal investments from Softbank and Google, according to people briefed on the investments who spoke on condition of anonymity because they were not authorized to discuss Zynga’s finances publicly. Google and Zynga are also in the early stages of exploring a collaboration, these people said. Zynga and Google declined to comment or confirm a Google investment." 
  15. Eldon, Eric (2010), "Zynga’s Pre-Paid Virtual Currency Cards Have Expanded to More than 12,800 US Stores", Insidesocialgames.com, http://www.insidesocialgames.com/2010/03/25/zyngas-pre-paid-virtual-currency-cards-have-expanded-to-more-than-12800-us-stores/, retrieved 2010-04-05 
  16. 16.0 16.1 Tate, Ryan (2010-09-10). The Secret Dealer for Farmville Addicts. Gawker. Retrieved on 11 September 2010
  17. Chris Morrison (September 10, 2010). "Zynga’s Platinum Purchase Program Does Exist, Used Mostly for Internationals". Inside Social Games. http://www.insidesocialgames.com/2010/09/10/zyngas-platinum-purchase-program/. 
  18. Shambora, Jessica (2009-12-02). Zynga suddenly is everywhere. What gives?. Fortune. Retrieved on 26 August 2010
  19. Kelly, Tadhg (2009-12-18). Zynga and the End of the Beginning. Gamasutra. Retrieved on 26 August 2010
  20. 20.0 20.1 20.2 20.3 20.4 Jamison, Peter (2010-09-08). "FarmVillains". SF Weekly. http://www.sfweekly.com/2010-09-08/news/farmvillains/. Retrieved 8 September 2010. 
  21. Facebook App Notifications Moving to Your E-mail Inbox
  22. Farmville Maker is Hemorrhaging Players
  23. Eldon, Eric (2009-10-08). Meet Plinga, Apparently Zynga’s German Copycat. Inside Social Games. Retrieved on 10 December 2009
  24. 24.0 24.1 Takahashi, Dean (2009-12-07). Turning the Tables, Playfish Clones Zynga’s Poker Game on Facebook. VentureBeat. Retrieved on 10 December 2009
  25. Mob Wars Creator Puts A Hit Out On Zynga, Sues For Copyright Infringement from TechCrunch.com (February 14, 2009)
  26. 26.0 26.1 26.2 Hoge, Patrick (2009-07-13). Game makers fight over proliferating lookalikes. San Francisco Business Times. Retrieved on 31 August 2010
  27. Zynga Settles Mob Wars Litigation As It Settles In To Playdom Fight
  28. Webster, Andrew (2009-12-09). Cloning or Theft? Ars Explores Game Design with Jenova Chen. Ars Technica. Retrieved on 15 December 2009
  29. Arrington, Michael (2009-11-02). Scamville: Zynga Says 1/3 of Revenue Comes from Lead Gen and Other Offers. TechCrunch. Retrieved on 2009-11-04
  30. Arrington, Michael (2009-10-31). Scamville: The Social Gaming Ecosystem of Hell. TechCrunch. Retrieved on 2009-11-04
  31. Arrington, Michael (2009-11-02). Zynga Takes Steps to Remove Scams from Games. TechCrunch. Retrieved on 2009-11-04
  32. Arrington, Michael (2009-11-06). Zynga CEO Mark Pincus: "I Did Every Horrible Thing in the Book Just to Get Revenues". TechCrunch. Retrieved on 11 December 2009
  33. Pincus, Mark (2009-11-06). To Zwink or Not?. Mark Pincus Blog. Retrieved on 11 December 2009
  34. Arrington, Michael (2009-11-08). Zynga’s FishVille Sleeps With The Fishes For Ad Violations. TechCrunch. Retrieved on 2009-11-09
  35. Arrington, Michael (2009-11-09). Zynga's Fishville Gets out of the Penalty Box at Midnight. TechCrunch. Retrieved on 2009-11-14
  36. Facebook facing legal action over unauthorised payments from The Telegraph
  37. Gelles, David; Joseph Menn (2009-11-25). Facebook in Lawsuit over Unauthorised Charges. Financial Times. Retrieved on 10 December 2009
  38. Swartz, Jon (2009-12-07). Lawsuit says ads in social games are scamming players. USA Today. Retrieved on 10 December 2009
  39. Tate, Ryan (Nov 19, 2009). Facebook Named in Federal Class-Action Suit over Scammy Zynga Ads. Valleywag. Retrieved on 2010-02-21
  40. Tate, Ryan (Nov 19, 2009). Initial Complaint in Swift vs. Zynga. Valleywag. Retrieved on 2010-02-21
  41. Cars FKA Nissan/Infiniti Graphics and Name Poll - Zynga Community Forums
  42. Facebook and Zynga reported to the Data Inspectorate
  43. Zynga Game Network Draws Heat In San Francisco Over Marketing
  44. Letzing, John (2009-12-16). Facebook's Russian Backer, Digital Sky Technologies, Buys into Zynga. The Wall Street Journal. Retrieved on 16 December 2009[dead link]
  45. FarmVille's 'Sweet Seeds' Raises $427,000 for Charity from AOL's blog.games.com
  46. Zynga donates $487,500 to Haiti's children from Vator News
  47. Zynga Creates Haiti Relief Fund from Zynga.org
  48. Social network updates a friend to charities from San Francisco Chronicle
  49. Crunchies: Zynga’s Mark Pincus sees a future for socially-conscious virtual goods from Digital Beat

External links[edit | edit source]

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