Zynga wants its 290 million monthly users to start connecting with a “different type of friend.” In other words, people they aren’t already connected with on Facebook.
At its annual product event in San Francisco yesterday, the company previewed a feature called Zynga With Friends, to be rolled out over the coming months. It will unify Zynga games across all devices and platforms, including Apple iOS, Android, Zynga.com, and Facebook, and will incorporate features—such as a “social lobby,” chats, and suggestions for new friends—that encourage users to build a network going beyond their real-life Facebook connections.
The new strategy is crucial because Zynga has struggled in recent months. At one point, as analysts worried over its long-term business model, the company’s stock dropped to below half the value of its December IPO. It has since bumped up and down as analysts debate the company’s long-term prospects. One bad day occurred when Cowen & Co. analyst Doug Creutz wrote that Zynga daily game use fell 8 percent in May. Growth of the hit mobile game Draw Something, which Zynga acquired in March by buying OMGPOP for $180 million, has also declined since the acquisition.
Zynga With Friends, along with others features introduced Tuesday, comes as the five-year-old company looks to grow on mobile devices and seeks to keep its base of casual gamers from moving on to other social distractions.
Executives said yesterday that people return to a game more often when they compete with others who share their skills and gaming interests—and those people may turn out to be complete strangers. Starting with the recent hit game Bubble Safari, Zynga is also introducing a multiplayer option so up to four people can interact while playing.
“Real-life friends don’t always match a gaming identity. We’re providing a new way to meet people,” says Reed Shaffner, Zynga’s director of product. However, the Zynga network will incorporate and build upon a player’s Facebook friends, rather than replacing the company’s close ties with the world’s largest social network, he emphasizes. “We believe that people should have the best people to play with on any platform.”
A pioneer of online social games, Zynga took in $1.1 billion in revenues last year selling virtual goods and advertising within a string of hit games like Farmville and Words With Friends. Yet most of its titles are played primarily on the Web, through Facebook, at a time when many people are using smart phones more.
On Tuesday, Zynga also detailed new efforts to attract outside game developers, especially for mobile devices. It launched an API that some third-party studios can use to build games that incorporate Zynga features and access its analytics. Over time, the integration could be made available more widely to all developers. Through a new program, Zynga Partners for Mobile, the company will directly cultivate mobile game developers such as Saba Transmedia, which previewed a new game, Rubber Tacos, yesterday.
Another important area for growth is China, where Facebook is blocked. Today, Zynga has more game players outside of the U.S. than inside the country, says Andy Tian, general manager of Zynga in China. He is focused on expanding Zynga’s presence in the world’s largest Web and mobile market, through partnerships with China’s Tencent and Weibo, the Twitter-like microblogging service. Last month, Zynga launched Draw Something in Chinese and 11 other languages. The China office also helped develop a game called Ruby Blast.
Tian says China has a strong game culture and a large potential for growth, despite roadblocks for other U.S. Internet companies. “There are always challenges in China as a foreign company,” says Tian. “But gaming and entertainment isn’t as controversial as the services provided by companies like Google or Facebook.”
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