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Zynga, Inc.
Type Private
Founded 2007
Headquarters San Francisco, California, USA
Key people Mark Pincus
Eric Schiermeyer
Michael Luxton
Justin Waldron
Andrew Trader
Steve Schoettler
Industry video games, social network service
Website http://zynga.com/

Zynga is a casual 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.

Contents

History

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 on 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]

In December 2009, Russia's Digital Sky Technologies bought a $180 million share of Zynga.[5]

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

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

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

Business model

Zynga is supported in two manners: Via direct credit card payments and partner businesses.[9] Several Zynga games require an "Energy" characteristic to play. Engaging in "Missions", a core feature of many games, consume 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[9] or PayPal. From within the game, players can purchase the points for a fee: USD$5.00 for 21 game credits, for example.

Controversies

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

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Replication of existing games

Zynga has been accused several times of copying game concepts of popular games by competing developers.[10][11]

The launch of Mafia Wars sparked a lawsuit from the makers of Mob Wars,[12] which was settled out of court for $7–9 million.[13]

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. [14] In addition, Zynga's FarmVille is similar to Farm Town.

Other companies have responded by copying Zynga's games as well. Playfish, publisher of Pet Society (a game copied by Zynga), announced the creation of Poker Rivals to rival Zynga Poker.[11] Playfish then launched a game called Gangster City, which is similar to Mafia Wars.

Zynga founder Mark Pincus has dismissed the criticisms, saying that competing video game makers have always released similar titles for each genre of game.[9]

Lead generation scams

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.[9] 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.[15] Arrington also alleged that Facebook was complicit in this.[16] 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.[17]

Arrington continued to question Pincus' role in the scams, republishing a video of a speech by Pincus. [18] In the speech, Pincus said:

So I funded [Zynga] myself but I did every horrible thing in the [face]book to, just to get revenues right away. I mean we gave our users poker chips if they downloaded this Zwinky toolbar which was like, I don't know, I downloaded it once and couldn’t get rid of it. *laughs* We did anything possible just to just get revenues so that we could grow and be a real business.

—Mark Pincus, Speech from Startup@Berkeley

In response, Pincus noted that after offering the Zwinky toolbar, his team of ten decided to remove it since it was a "painful experience."[19]

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."[20] FishVille was later un-suspended at midnight November 9/10.[21]

Several suits were filed against Zynga for promoting such offers,[22][23] 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.[24][25][26]

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.[9]

Other criticism

In September 2009 Zynga was threatened with legal action by Nissan for alleged use of 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.[27] At the time they also renamed and redesigned automobiles depicted as being made by GM, Ferrari, Lamborghini, Saab, and others.

Another source of criticism is non-players who grow tired of seeing updates about their friends' social gaming activity. Facebook groups created to express displeasure regarding overexposure of Zynga's games attracted millions of members.[9]

Games

  • Attack!
  • Blackjack
  • Café World
  • Dope Wars
  • Dragon Wars
  • FarmVille
  • Fashion Wars
  • FishVille
  • Football
  • Friend Factory
  • Gang Wars
  • Ghost Racer
  • Guild of Heroes
  • Heroes vs. Villains
  • Live Poker
  • Mafia Wars
  • My Heroes Ability (Zynga's only original title, discontinued)
  • Pathwords
  • PetVille
  • Pirates: Rule the Caribbean!
  • Prison Lockdown
  • Roller Coaster Kingdom
  • Space Wars
  • Scramble
  • Scramble Live
  • Sea Wars
  • Slayers / Vampires / Werewolves / Zombies
  • Special Forces
  • Street Racing
  • Sudoku
  • Texas Hold'Em
  • Triumph
  • Vampire Wars
  • Word Twist
  • YoVille

Zynga.org

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.[28][29] Zynga is using tie-ins via three of its top games to raise money for relief of the 2010 Haiti earthquake.[30] Zynga offers special bulldogs in YoVille, the proceeds going to the San Francisco SPCA.[31][32]

Going forward, Zynga.org will be adding more opportunities for charitable-cause contributions in its other games.

References

  1. ^ "Contact Zynga." Zynga. Retrieved on February 23, 2010.
  2. ^ About Zynga from Zynga
  3. ^ a b "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. ^ Letzing, John (2009-12-16). "Facebook's Russian Backer, Digital Sky Technologies, Buys into Zynga". The Wall Street Journal. http://online.wsj.com/article/BT-CO-20091216-713927.html. Retrieved 16 December 2009. 
  6. ^ http://www.linkedin.com/companies/167907
  7. ^ "Zynga Opens First International Office in India". Zynga. 2010-02-17. http://blog.zynga.com/2010/02/zynga-opens-first-international-office-in-india-.html. Retrieved 2010-02-17. 
  8. ^ Mulligan, John (2010-03-18). "Irish base for US online gaming giant to boost our 'smart economy'". The Irish Independent. http://www.independent.ie/business/irish/irish-base-for-us-online-gaming-giant-to-boost-our-smart-economy-2102828.html. Retrieved 2010-03-18. 
  9. ^ a b c d e f 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. 
  10. ^ Eldon, Eric (2009-10-08). "Meet Plinga, Apparently Zynga’s German Copycat". Inside Social Games. http://www.insidesocialgames.com/2009/10/08/meet-plinga-apparently-zyngas-german-copycat/. Retrieved 10 December 2009. 
  11. ^ a b Takahashi, Dean (2009-12-07). "Turning the Tables, Playfish Clones Zynga’s Poker Game on Facebook". VentureBeat. http://venturebeat.com/2009/12/07/turning-the-tables-playfish-clones-zyngas-poker-game/. Retrieved 10 December 2009. 
  12. ^ Mob Wars Creator Puts A Hit Out On Zynga, Sues For Copyright Infringement from TechCrunch.com (February 14, 2009)
  13. ^ Zynga Settles Mob Wars Litigation As It Settles In To Playdom Fight
  14. ^ Webster, Andrew (2009-12-09). "Cloning or Theft? Ars Explores Game Design with Jenova Chen". Ars Technica. http://arstechnica.com/gaming/news/2009/12/cloning-or-theft-ars-explores-game-design-with-jenova-chen.ars. Retrieved 15 December 2009. 
  15. ^ Arrington, Michael (2009-11-02). "Scamville: Zynga Says 1/3 of Revenue Comes from Lead Gen and Other Offers". TechCrunch. http://www.techcrunch.com/2009/11/02/scamville-zynga-says-13-of-revenue-comes-from-lead-gen-and-other-offers/. Retrieved 2009-11-04. 
  16. ^ Arrington, Michael (2009-10-31). "Scamville: The Social Gaming Ecosystem of Hell". TechCrunch. http://www.techcrunch.com/2009/10/31/scamville-the-social-gaming-ecosystem-of-hell/. Retrieved 2009-11-04. 
  17. ^ Arrington, Michael (2009-11-02). "Zynga Takes Steps to Remove Scams from Games". TechCrunch. http://www.techcrunch.com/2009/11/02/zynga-takes-steps-to-remove-scams-from-games/. Retrieved 2009-11-04. 
  18. ^ Arrington, Michael (2009-11-06). "Zynga CEO Mark Pincus: “I Did Every Horrible Thing in the Book Just to Get Revenues”". TechCrunch. http://www.techcrunch.com/2009/11/06/zynga-scamville-mark-pinkus-faceboo/. Retrieved 11 December 2009. 
  19. ^ Pincus, Mark (2009-11-06). "To Zwink or Not?". Mark Pincus Blog. http://markpincus.typepad.com/markpincus/2009/11/to-zwing-or-not.html. Retrieved 11 December 2009. 
  20. ^ Arrington, Michael (2009-11-08). "“Zynga’s FishVille Sleeps With The Fishes For Ad Violations". TechCrunch. http://www.techcrunch.com/2009/11/08/zyngas-fishville-swims-with-the-fishes-for-ad-violations/. Retrieved 2009-11-09. 
  21. ^ Arrington, Michael (2009-11-09). "Zynga's Fishville Gets out of the Penalty Box at Midnight". TechCrunch. http://www.techcrunch.com/2009/11/09/zyngas-fishville-gets-out-of-the-penalty-box-at-midnight/. Retrieved 2009-11-14. 
  22. ^ Facebook facing legal action over unauthorised payments from The Telegraph
  23. ^ Gelles, David; Joseph Menn (2009-11-25). "Facebook in Lawsuit over Unauthorised Charges". Financial Times. http://www.ft.com/cms/s/0/058f5260-d92c-11de-b2d5-00144feabdc0.html. Retrieved 10 December 2009. 
  24. ^ Swartz, Jon (2009-12-07). "Lawsuit says ads in social games are scamming players". USA Today. http://www.usatoday.com/tech/gaming/2009-12-07-games07_ST_N.htm. Retrieved 10 December 2009. 
  25. ^ Tate, Ryan (Nov 19, 2009 12:50 PM). "Facebook Named in Federal Class-Action Suit over Scammy Zynga Ads". Valleywag. http://gawker.com/5408472/facebook-named-in-federal-class+action-suit-over-scammy-zynga-ads. Retrieved 2010-02-21. 
  26. ^ Tate, Ryan (Nov 19, 2009 12:31 PM). "Initial Complaint in Swift vs. Zynga". Valleywag. http://valleywag.gawker.com/5408473/initial-complaint-in-swift-vs-zynga. Retrieved 2010-02-21. 
  27. ^ http://forums.zynga.com/showthread.php?t=195814
  28. ^ FarmVille's 'Sweet Seeds' Raises $427,000 for Charity from AOL's blog.games.com
  29. ^ Zynga donates $487,500 to Haiti's children from Vator News
  30. ^ Zynga Creates Haiti Relief Fund from Zynga.org
  31. ^ Social network updates a friend to charities from San Francisco Chronicle
  32. ^ Crunchies: Zynga’s Mark Pincus sees a future for socially-conscious virtual goods from Digital Beat

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