Mark Pincus, Founder of Zynga, Is Replaced as CEO Again

http://www.nytimes.com/2016/03/02/technology/mark-pincus-will-again-leave-zynga-ceo-job.html?ref=technology&_r=0

by pavornyoh • 10 years ago

73 69 10 years ago

Zynga needs another hit. Perhaps they should sponsor a sort of games XEROX PARC within Zynga to attempt a more speculative and R&D-based approach. From my non-insider perspective, Zynga is not investing anything new in terms of intellectual or human capital. They are depleting their existing assets, just as they are wringing cash from their physical real estate. The company is currently being run like an old hotel that is no longer stylish, but can still produce some net cashflow as long as necessary repairs are neglected.

tixocloud3• 10 years ago

True for most gaming companies. Always a big challenge of figuring out the next big hit. You're always only as good as your previous hit.

dayjah• 10 years ago

But once you find it, oh boy, can you make it make money. I'm always astonished at how companies like Activision can make billions per release of Call of Duty. EA with their yearly cadence of sports sims is another example.

PakG12• 10 years ago

This is exactly why I don't understand why people buy publicly traded video game stocks. Nintendo, I can understand. They're a platform company. Their ability to make money depends on overall industry trends and the ability of other companies to do the heavy lifting of outputting hits. Although even they're a bit strange in that they depend a lot on a portfolio of homegrown titles.

But normal game companies? Especially casual game companies? Do people really have that much faith that Candy Crush and the like is more than a generation's flash in the pan like Tetris, Pogs, or Tamagotchis?

emodendroket6• 10 years ago

But I think the boom/bust cycle is exaggerated with these kind of "casual" games. There are diehard Nintendo or Sega fans; who anxiously awaits the next release from Zynga? What percentage of players even know or care that Zynga made the game they're playing?

peter303• 10 years ago

True of MOST TECH companies, which are one-hit fade-aways. The ones that last more than a decade have had a 2nd or 3rd hit like MicroSoft and Apple.

z3t43• 10 years ago

Only problem is that just like the other game "money-grab" cough king cough companies, all their successful games are just copies of other less know successful games. So the problem is they don't know how to make a game, just how to copy a game.

elthran• 10 years ago

Or even worse, just copies/mods of their own other games

zekevermillion7• 10 years ago

Yes, I think their philosophy is to take proven models and tweak the mechanics to be more enforcing of monetizing behaviors. After awhile, people get hip to this and start to get smarter than the simplistic casual game models. If I were an evil game pusher, I would try some more ambitious hardcore games -- as in, fully immersive, on the order of Star Citizen (but perhaps with more innovative models / lower production costs).

tryitnow• 10 years ago

That's a well-intentioned idea, but it's probably just throwing good money after bad.

There are some old hotels (literally) out there that can still crank out cash and they're fine investments as long as you set your expectations appropriately.

I just the best talent will either start their own companies or join smaller companies where they can have more equity participation.

zekevermillion7• 10 years ago

Well yes, from the perspective of talent why would you even want to go work for Zynga? But they could probably make it worth your while if you're not already financially independent or ethically opposed to their goals.

mathattack4• 10 years ago

Yes. And it's very hard to copy your way into greatness, or gamify your way into greatness if the core product is weak. You can get one hit wonders, but people eventually resent the experience.

In a sense I see parallels with old AOL. They were still making money off the landline accounts sold to our parents, and did some copying here and there, but very little new greatness while they lived off the cash cow.

chipotle_coyote• 10 years ago

While this is a bit of a side point, I think the "AOL makes its money off people who haven't ever cancelled dial-up" meme is a little unfair to the company. They do make some money that way, and the ethics of doing that are (to be charitable) dubious, but after their separation from Time-Warner they executed a mostly successful pivot into advertising technology and content. You may not love the Huffington Post, TechCrunch or Engadget, and you've probably never even heard of "AOL Platforms," but when Verizon paid nearly four and a half billion dollars for AOL last year it wasn't about getting access to the coveted dial-up market.

A better comparison might, perhaps ironically, be Yahoo. Not that Yahoo was ever as hated as Zynga, but after their usefulness as "the front page of the Internet" faded -- before the first dotcom boom went bust! -- Yahoo never really figured out what the hell to do with themselves, beyond continually insisting that they were an important media company. Somehow.

humbleMouse4• 10 years ago

Zynga has 900 million cash in the bank and just sold their headquaters. If they are not total idiots they should be able to keep the lights on and paying developers for a while. That's why I think their stock is a deal @2$/share.

JonFish85• 10 years ago

Maybe I'm misunderstanding what you're saying, but if you say their future involves burning through their cash-on-hand just to keep the lights on, why is the stock worth anything to you?

humbleMouse4• 10 years ago

My point is that I think it's a good bet that they make at least one more game that people like at some point in the future. If they spent 50 million dollars a year running their business they will be around for another 20 years, and in that time span the chances are good they will make another decent game. Then when their stock jumps I will sell it for a healthy cash out.

Another scenario is that they get acquired by a different company. In this scenario it is also likely their share price would jump and I would cash out as well.

edvinbesic• 10 years ago

I'm assuming he means that they have enough money to keep going until they come up with the next cash cow at which point the stock will skyrocket again like a yoyo.

Wether or not that's a good bet is debatable considering their track record to date.

erikpukinskis• 10 years ago

The same reason a YCombinator company is worth anything. Nonzero probability of them doing something really valuable while the lights are on.

Lanari• 10 years ago

From how Zynga HQ looks, that HQ would cost them a really lot of costs.

In my opinion, the problem with Zynga was the social games bubble, years ago I used to read on tech news websites that Zynga is really big to the point that Facebook own 25% of its revenue to Zynga, Facebook was just started monetizing their business. Sometimes you shouldn't "look big" as much as others expect you to be.

speeder• 10 years ago

I am a game maker by heart, and got in and out of the game industry multiple times, and I keep in touch with some people (ranging from the nobodies that do important work, like Dice and Maxis engineers, to sometimes having a facebook chat with a celebrity, like John Romero)

One thing that is common, is that everyone that knows how the game industry work, always keep pointing to Zynga that they are doing it wrong, but they don't change their ways, and keep doing it.

Yes, game industry IS hit driven, and this does lead to some problems (example: Maxis was VC funded, investors were expecting their growth to be stable, not a roller coaster, after the massive hit that was SimCity 2000, they had no time to outsell SimCity 2000 the following year to keep a growth pattern, VC didn't understood that and the end result was them being sold to EA). But even then, on long term is obvious that a company experience and solidity is more important, for example Bethesda, that uses the terrible and buggy engine Gamebryo, although I am one of the voices that keep asking them to change, I suspect the reason why they can crank games with similar quality every time, is BECAUSE they never changed their tools, and make all games similar to each other. Another RPG example is Obsidian, that for each game used wildly different tech, yet all their games are known to have a certain baseline quality that came with experience. Or for a mobile game company, Toca Boca, all their games have a distinct style of theirs, and they have a clear process on how games are created.

Zynga got one part right, that is to "fix" the hit driven problem by having some stability with their "average" releases, the part they got wrong is that they do that by just copying everyone else games, and copies rarely do great, specially in time consuming games.

When WoW appeared, and MMORPG making became a mania like tulip-mania, with investors throwing money at MMORPG companies with little thinking, I warned lots of people that making a WoW copy would never work, WoW is a time consuming game, if you make a clone, why the person would play the clone? a WoW fan will keep playing WoW, and someone that don't like WoW, won't play the clone.

Every single company I knew, that attempted to make a MMORPG after seeing WoW success (instead of making the game a MMORPG because it made sense) was a failure, I know investors that lost millions with this, and I know people that accepted a proposal I vehemently reject that got problems too. (one company approached me, and asked me to drop out of college to join their MMORPG team, the company owners visited Blizzard headquarters, were mesmerized, and wanted to copy it, but doing a christian MMORPG, I flat out refused, the company somehow went bankrupt only 3 months later).

Zynga needs to start doing serious game R&D (instead of making lots of clones), and also find their own style of games to create consistently, and find their average revenue to size the company according to it...

If you have a hit, just store the cash, many, many game companies of all sizes learned the hard way that growing after a hit can result in you having to be forcefully shrink again to pre-hit levels, usually in a painful manner that might make you lose lots of money.

digitalneal• 10 years ago

I think we all know there will be another gold rush for "social" game companies once VR takes off. So, IMHO, Zynga just needs to slug it out till FB gets VR pushed to the masses.

soup10• 10 years ago

"I think we all know" VR is a niche gimmick until proven otherwise. Outside the bubble of enthusiasts nobody is convinced people will attach a black box to their eyeballs to game.

TillE• 10 years ago

Yeah it's almost as dumb as dancing around, waving a plastic stick. Oh wait.

kin• 10 years ago

From both watching and experiencing demos, it has proven me otherwise. But you're right, it's not even in the market yet so time will tell if the public will be down for it, especially with that stupid cover on Time magazine (http://4d663a369f9f03c3c61e-870e77779efd63f7bd6c2ee08d8cfae6...). I'm excited though.

kdkooo• 10 years ago

I think this is a really valid point. Does anyone know if Zynga has dedicated any resources to being ready to jump in on the VR scene once it hits?

mathattack4• 10 years ago

Is there any evidence that they can get another major hit? More broadly - who are the companies that have had multiple gaming hits, and what does (or doesn't) Zynga have in common with them?

davyc1234• 10 years ago

They were able to have medium mobile successes with releases of Slots games and Farmville 2 Country Escape. The mobile games business is getting more mature and only a couple companies are really well positioned to execute and have actually proven they can make followup multiple big hits: Machine Zone, King, and Supercell. Zynga is not at their level and perhaps fighting to be in the next tier of mobile gaming companies (5-20), which isn't necessarily a big criticism that their not a top dog. But given their resources they should be able to compete better. The problem is their upper level management and C level execs, which have combined to produce a terrible company culture along with making poor strategic decisions. Their game development is driven mainly by MBA type Management consultants and East Coast ivy league graduates. Only on the shiny surface are they are Silicon Valley tech company- more of a stepping stone for opportunistic business types to get into tech. They have a great analytics infrastructure, but then they are not smart with how they use the data- and it's rather just used as a tool for Managers and execs to push their own agendas and to claim credit for various projects. Their are whole departments that are essentially useless and have no clue. Across the board- terrible management. If they empowered the people on the ground their who know what their doing, then they'd have a much better chance of success.

mathattack4• 10 years ago

If they empowered the people on the ground their who know what their doing, then they'd have a much better chance of success.

It's very hard for companies to regain this once it's been lost. This is why I think it may be hard for them to regain their greatness.

Mark Pincus, Founder of Zynga, Is Replaced as CEO Again

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