The Zynga Story (So Far)

I needed to make some falcaccio. I was actually asking people to come over and water my plants virtually, So you may have already guessed today's topic is a quick look because it hasn't been that old, a quick look at the history of Zinga and Zinga is a company that has made a big name for itself, not always in a positive way online. And if you don't know what Zinga is, it's a company that's based out of San Francisco, California, as many tech companies are, and it

is a video game company. But it's a game company that typically produces games that are either meant to go on mobile devices, so smartphones and tablets, or they're meant to exist on another platform like Facebook or Google Plus. Although you can also go to the Zinga dot com homepage and play games within widgets. Yeah, and uh, if you, if you weren't sitting from where we were. As soon as Jonathan said that this episode was going to be about Zinga, you probably didn't hear the groans of many

of our listeners. We we heard you. It's okay, it was hold on. It was like a thousand voices created out in English and then were suddenly silenced. Yeah, zing is it is a company that has acquired a following and a big group of people who have pitchforks and torches both there there there seemed to be a few

people in the middle of that, but not really. It's it's uh, we'll get into that in just a minute, but it does have quite a large group of people who really pick on Zinga because of its business practices. Um so, some people really love the games and some of the games I don't really consider games because it's really no ending to them. They're sort of software toys. But they do they do make some games and things and and there they had quite a huge, uh following,

even just a short time ago. But let's but it's it's an interesting story because, as as Jonathan pointed out, it has been a very short time. I mean, they went from sort of nobody's in the industry, competing with some of the biggest players like Electronic Arts to you know, darlings of the computer industry and sort of towards back again and not quite back again, but they're they're approaching it. They're hurt as of the time. We're recordings in and

we'll get more into all of that. So this is a company that was founded by a fellow named Mark Jonathan Pinkus who found h Zinga right around two thousand seven, and and Pinkas had been working well, he held several jobs which in an interesting article we read on venture Beat, which it was what was it a twelve page article about the history of Zinga. Oh, that's an amazing article.

I would totally recommend people going to check this out of because we we can't cover the same amount of material and it it actually ends before we wanted to end too, so but a lot of our our research. It's a very well written article and we use a lot of our research on this on this It was written by Dean Takahashi for venture Beats and also has been converted converted into a sixty three page e book on Amazon's Kindle bookstore. So yeah, it's it's a very

deep look at the history of zincing. Now, we should say this was written in two thousand eleven and a lot has happened since then. But uh. In that article they mentioned how Pinkas had said he had essentially been fired or asked to leave every job he held earlier on in his career, and then came to the conclusion that what he needed to become was an entrepreneur, so working for himself rather than working for someone else who

would eventually tell him to go away. Well, that's that's what these are not my well that was my paraphrasing of what he said, but these were his words, and and he was probably being somewhat facetious, but essentially what he was saying is that he has this desire to create businesses, and so he struck out and started struck out his inn, left the corporate world, not struck out his inn with it, and then started to launch businesses and several of them saw some early success. He h

he launched companies like Freeloader Incorporated. UM, he launched a very very early social network called Tribe Networks, which did not ultimately go anywhere, right, I mean, that was one of those ideas where it actually preceded things like MySpace and Facebook. So so he he was onto something. He saw the he saw the horizon. He saw that social networking could be a big thing. It's just that his approach, perhaps it wasn't the right approach, perhaps it didn't come

at the right time. It might have been some sort of combination of these and other factors as well. At any rate, it did not take off like a MySpace or later on a Facebook. No, No, that's that's true. UM. And it's also interesting to note that none of the companies that he had uh started before and he they're conflicting reports about the number of companies that he was starting and or involved with. Um, they're a handful, like

the ones that that we've mentioned. UM. Apparently too, he has been quoted as saying that there were far more failures than successes too, so he may have been involved with more of them. But they're not naming companies. We're not talking about somebody like you know, Trip Hawkins, who's known for being a you know, he he was you know, founder of e A and you know, got into digital chocolate later. Um. But yeah, I mean, he wasn't known as a gaming industry giant who started a new a

new gang of gaming company. This is his first gaming for a and uh there's also some mild controversy about the name Zinga. He has been quoted as saying is named after his uh dearly departed puppy dog, bulldog. Yeah. And then there's another story that I read on a totally different article which said that he had a friend who used the online handle Muzinga often people would just refer to him as Zinga, and that he had named

his dog after this person. Uh, but that's sort of the same story, but only yeah, a little yeah, a little bit more of no tracing it back where does vend? But anyway, he called the company's He hired on some folks like h Eric Scheiermeyer, Michael Luxton, Justin Waldron, Kyle Stewart,

Scott Dale, Kevin Hagen, Steve Shuttler, and Andrew Trader. And he had these guys together, and his idea was to create these simple, uh easy to learn, easy to play games because he was he kind of equated it to going to a cocktail party and hanging out and just chatting for a while. You know, it's a pleasant experience. You don't tend to have super deep conversations at a cocktail party unless you're going to a cocktail party held

by nuclear physicists. Um. Then in general, you tend to talk about a lot of different things and you don't get too far down into the service, but you can have an entertaining conversation sort of the same thing he wanted to do with these games, Like he saw the games that other companies were making that were these very deep, rich experiences, um, lots of work developing the world and the physics or or the game mechanics, and he said, well, you know that there is a place for that, But

what if we concentrate on games that were meant for a more casual player, someone who you know, enjoys the game mechanics, the gameplay is fun and has some sort of reward system in place so that the player feels like they should keep playing. But it doesn't need to be as deep, and it doesn't have to exist on its own. It doesn't have to be like, uh, you don't have to go to a store and buy a box that has a disk in it and bring it

home and and install it. It's something that could exist on top of another existing platform, whether that's a web page or a social network as it would turn out later, or a mobile device. Yeah. Um, and uh. One of the one of the earliest maneuvers that I think set zinga apart from its competitors was, uh, it launched games on my Space because that was, you know, the network of choice, but it also it was hedging its bets on the new competitor, Facebook. Yeah, back in two thousand

and seven. It's easy for us to forget now that my Facebook has beaten a billion subscribers, right. Facebook is now over one billion active subscribers or accounts. I'm betting that some of those people have multiple accounts, probably just again, but still that's a lot of accounts. Over five million people have accounts on Facebook. Um. But yeah, yeah. Back in the day, you know, my Space was dominating for the longest time, and Facebook was only open to college students.

So for a while, a lot of people thought that Facebook was going to be an also ran it was never going to catch up. That, of course, is not what happened. And and now we're in an era where my Space is launching yet another redesign, dramatic redesign to see if they can can can emerge from the dull drums and perhaps become a player again, and it may

very well happen. It's easy to write off my Space after its precipitous fall, but we've seen companies rise and fall and rise again before, so you know, you never say never at any rate. Like like Chris was saying, Zinga, they were looking ahead and saying, you know, we want to make sure that are what we're producing ends up getting to as many people as possible. And that means we can't just assume that one platform is always going

to be the way people access content online. And so they started to create games that would work on Facebook. And you know, Facebook had a very limited a p I at the time, like there were an application programming interface, right, So Facebook was not a platform for other programs early

in its existence. Certainly no it that eventually changed, and they did experiment with it fairly early, but it was you know, it was until fairly recently that it actually became a viable platform for a company to launch an app. But back in two thousand seven, Zinga released a game on Facebook, and it was a social poker game, free

to play, Texas Hold Him poker. Okay, so Zinka did a very smart thing here, because you know, this is back when poker, which had been around for a very long time, uh you know, just sort of sitting there under the surface, waiting to be rediscovered. And that's about when, you know, in the mid two thousand's, that's when people were really getting back on board, which was really strange. I mean it just seemed to come out of nowhere, like, uh, suddenly there was this huge focus on poker in general

and Texas hold Him in particular particular. ESPN started showing it and thought, wow, this has become a sport, and uh, you know, there was a lot of interest. I mean I've I've watched my share of World Series of Poker tournaments and it is a very fascinating thing. And it's you know, even by two thousands seven that that fervor had not really died down. I would say that perhaps today there's not quite as much interest and as there

used to be. I mean we used to see like celebrity poker tournaments and on television all the time, but it's still there's still an interest there. And uh, so Zinga said, well, you know, let's produce a game that is on a social network that's getting a lot of attention, and let's do it a game that's actually popular in the UH and the zeitgeist at this moment. Let's let's combine these things and we're going to try and capitalize

on it. And it worked. Yeah, the UH. It's kind of interesting too because this is where social gaming is now pretty big thing, and so is casual gaming. Again, it's sort of like poker these things. Well, social gaming, no, but casual gaming has. It's been around for forever and ever, you know. But the thing is, it wasn't the big money maker that it is now, and it is thanks in part two companies like zinga UM who found ways

to get people back involved with it. You know, you play let's say you play a game on a social game, a casual game on a UM you know, online somewhere. Okay, so you've played it, and you know, after a couple of weeks, you know that the interest kind of waynes You know, I've played it. I love that game, and you'll come back to it again in the future maybe, but you know, it's you get away from it because you lose track of you know, you have something you

gotta do on Tuesday night. Now on Wednesday night's kind of packed two and after a couple of weeks ago, I just don't feel like going back. But Zinga introduced the the concept of adding poker chips to this game. But this is one of those things that Zinga has developed a reputation for acting in sort of weird ways on this this Holdham Poker game. They they had a

thing where they you could, you could add more friends. Um, you know, they wanted you to get poker chips and if you would, uh you know, help them, uh you know, download by downloading this key. What almost Yeah, this was one of those things where actually this would come back to hunt Pinkas later where he he essentially said in a later interview that he made every horrible decision you

could make in order to make money. He was trying to find different ways to generate revenue, and it didn't matter what impact it would have on the user experience.

That's that's how people have interpreted those words. Now, whether Pinkas really meant truly that he tried every horrible thing or not doesn't really matter, because as people in later years, uh said, you know, they just went ahead and interpreted it as that and that became the reality, which is kind of you know, just says be careful what you say, because because later on, even if you're saying something and you're exaggerating in order to make a point, people may

later take that exaggeration as the gospel truth. And whether or not it was, that's how it's been interpreted. So yeah, Pinkas said, we tried all these different things, and if you downloaded this wiki, the idea was that you would download this this tool and it would in the game, you would end up being rewarded with more poker chips. But again it was a negative experience for most users. And and even Pinkas said, like, I couldn't figure out

how to remove this thing once I installed it. So uh, there were other ways of trying to generate revenue, and in fact, uh, the game was profitable for Zinga. They ended up raising some money. It wasn't a whole lot in the grand scheme of things, but it was important to Pinkas that they they show that the company was capable of generating revenue before he went out to seek

around of funding. He didn't want to go out and hit venture capitalists without first being able to say, look, I can prove to you that what we're doing has a play in this market. This company has a demonstrable value because we're able to make money. Otherwise you're just going up to catalists and saying, hey, look, this game is really popular, a lot of people are playing it.

You should give me money. Like, until you can prove me money, until you can prove that all those people are generating revenue for you, it's really hard to get the investors on board. I mean Twitter has seen this, uh for for years. Since Twitter started, they had a lot of users, but for the longest time, there was really no revenue generating uh operation there. I mean there's

just very little, if any, and so uh you know. Essentially, the way that to convince venture cabalists to invest in something like Twitter is to say it's a huge, huge service. Millions of people are using it and depending upon it. Uh, the gap that it would leave if it went away is enormous. Therefore it is valuable. All we have to do is figure out the a of tapping into that value.

And that's enough for some investors. But Pinkus was like, no, I want to make sure that I have a good story to tell when I go and visit these venture capitalists, and he did, and so in two thousand and seven he actually had the first round of UH venture capital and and was able to get investments. Then he was also UM well back in January two thou because it was late two thousand seven when we started pursuing it.

January two tho eight, they raised about five million dollars from various venture capital funds and then UH six months later they did a second round of fundraising and raised another twenty nine million. And at that point they also hired on someone as a sort of consultant named Bing Gordon, who was a former chief creative officer with Electronic Arts. So here is someone who has had experience with the

major video game company coming on board with Zinga. UH. The the the title most often given to Mr Gordon is Consigliari, which, for those of you who are fans of the Godfather trilogy will think, wow, so some sort of quote unquote family consultant has joined on. Well, it's it's kind of funny since Mafia Wars was the the big cross platform hit for Zinga at that point, which may may or may not be related. Yeah, and also the the acquisition of Yoville, which is still you know,

moving along out there. They they have continued to support that game. Now, Mafia Wars raises one of the big big stories within Zinga, which is something that would haunt them for years. Um a few short years that have existed between when Mafia Wars has come out and today. But one of the issues about Mafia Wars was that people pointed out there was an earlier game called Mob Wars, which, um, Mafia Wars bore a certain similarity to Mob Wars, some

would say, to the point of identity. This is another one of those points which the uh Zinga detractors like to make, um, which is and it's not completely unwarranted. Um yeah that will I will neither say that it is or isn't warranted to say that many of Zinga's games bear a striking resemblance to other popular, successful social

network games. And and there are there the first right. Well, there have been people from Zinga, like former employees, who have said that the message, essentially, according to these former employees, was that find games out there that work, copy them, and do whatever you have to do to be as popular or more popular than the previous game. Now, whether or not that was actually a directive within Zinga, I

cannot say. This may very well be the words of employees who have uh, you know, an ax to grind against the company, and they're saying whatever they want to kind of disparage it. I don't know. I don't want to pass judgment seeing as how I don't have that direct experience. But there have been people who have essentially accused Zinga, former employees who have accused Zinga of purposefully setting out to copy other games and to use the popularity of Zinga and its broad reach to essentially, uh

co opt those games from the original creators. Now, with the case of Mob Wars and Mafia Wars, there's some more murky issues there. Uh. The Zinga executives were saying things along the lines of, you know, we were in talks of actually acquiring Mob Wars, but then the guy who designed Mob Wars learned about how Zinga was going into selling virtual goods in order to generate revenue. Here's another way of generating revenue with a free to play game.

So besides convincing you to download tools that you will never get rid of as a way of generating revenue by making a partnership with whomever is creating the tool. Another way is to sell virtual goods that give you some sort of edge or some sort of uh customization ability within a virtual game for real money. And once the guy from Mob Wars saw that, then he began to incorporate those same features within Mob Wars. So Zinga has said, wait, no, the guy from mob Wars was

copying us. So yes, our game is also about mafia warfare. But our game was built a round this idea of selling virtual goods. His wasn't until he heard about it from us. So there's this sort of there's this crossfire of accusations between the two groups, right, But in the end you have Mafia Wars coming out, and there were lawsuits about you know, infringing copyright, infringing intellectual property. And this was not the one and only time this happened

to Zinga. That's happened, you know, in other with other games as well, um including one that one of the more popular games that Zinga pushed out was Farmville, and there was another farm based game that again people said, this bears a certain resemblance to this other game. And again there are conflicting reports about whether or not the people at Zinga were aware of that game, whether they were purposefully trying to copy it, or if this was

just a parallel development issue. Um. And again we don't have the whole story right. One one one report suggests that one of the venture capital fund UH fund managers had said, or or I guess the people at the venture capital firm had said, you know, why don't you do a farm game? Yeah, I don't know. It's it's it's very difficult to tell. Um. And uh. You know, there are a lot of stories that fly around when

you when you have this kind of corporate drama going on. Um. But yes, certainly, uh, certainly Farmville is another one of those games that that you know, came out at the same you know, time frame, a little later than another very popular farm game, So you know, it's easy to

make that comparison. Yeah, and uh. And also this is the time where if you were on Facebook during this time, you began to get irritated if you were not a fan of these games at the numerous UH notifications you would received whenever your friends were raising sheep or planting corn, and you had learned that there field of corn needed

watering or whatever. Okay, enough anyway, So yeah, this was this was a time where people who were not fans of this game became haters of the games because their their Facebook notifications were starting to fill up with these these game notifications which you could hide, and many of

us chose that option immediately. Well, um, you know many many people have talked about Mark Zuckerberg, the founder of Facebook, and whether or not he sees everybody's you know, personal privacy or you know everybody wants to have these connections to your friends, and you know these these questions. Well, Mark Pinkas is another person who basically says, you know, hey,

playing games is fun when you do it socially. So the Zinga games, uh, from when I first became aware of them, at least, which is I would I would guess Farmville. I think I became familiar with Mafia Wars afterward. Um, but yeah, that's one of the very first things you do, and you know, I wanted to try it out, see what it was all about. And one of the very first things they ask you to do when you when it comes on and say, hey, what other friends and

they look at your Facebook list of friends. Um, you know, they made it possible to look at just the ones that are playing the game, but for the most part, they say, hey, who in this entire list of friends wants a free mail of hey? Or you know what? You know, wouldn't these people really like to play? And you know you're playing experience will be much better the more friends you have playing it. And you know, there is something about social gaming I don't I don't mean

to disparage social gaming at all. No, I mean there are plenty of social games out there that I think are lots of fun, particularly if you have a lot of friends who are also into that game. And then there are games out there that if you're the only one playing, they aren't fun at all. You know, you need other people playing that game to make it worthwhile. I would argue that with my experiences with Zinca tie Ols that that's very much the case with a lot

of these vill games. You didn't see the dash right before, Yeah, I mean, if you, if you, if you, well, there's an option. This is another one of Zinga's uh you know when when they've been on the forefront of this movement, is hey, you don't have to if you don't want to share this with fifty of your friends, that's fine. You can pay up real money if you'd like to have in game money, that would be just fine with us. Right.

So again we're getting over to that virtual goods for real money, and in fact, that became the chief way that Zinga made money for a long time. Like the revenue that Zinga made came from selling virtual goods. And of course with that model, you want as many people as possible playing your game. Now, the game itself is free, So just because you have a half million people playing a game doesn't mean you're making money off of them.

But even if only a small percentage of that million are ponying up real cash for virtual goods, that's a lot of money. I mean, when you're talking about huge numbers like that, even a small percentage can be a significant amount of cash. And that's also why Zinga released so many games. It wasn't like you know, a game company that might have one or two titles, maybe maybe as many as six titles in a year. They're releasing

games all the time. And uh Pincus is not afraid to pull the plug on a game if he sees that it's not really working. He's he's killed off games early early on in the process when he said, Okay, no one is really sharing this among this test group. That tells me that this is not a very sticky game. Sticky meaning that this is the sort of thing that people like to go back to and they like to share it. Uh. Once he saw that, he said, all right, let's get rid of that, because we shouldn't be dedicating

any resources to something that's not getting results. Now, this also meant that people who worked for Zinga might be working on a project that ultimately could get the plug pulled on it shortly after launch, and you had such a quick turnaround rate that you were always working. That that working for Zinga could be a very demanding experience.

And uh, in fact, I did a look. I looked at the at some surveys online about employee reaction to working for Zinga, and uh of the people who worked there said that they would recommend Zinga to a friend who was looking for employment. So fifty just over half would say Zinga is a good place to work. And that study, well, the the the the latest I saw was FORLVE, but that could have been early because we're gonna get into Zinga's more recent experience in a little bit.

But the other thing was that fifty nine percent said they thought that Pinkus was doing a good job as CEO of Zinga, So that means were either not impressed or actively they did not like what he's doing. Yeah. Well, if you look at it strictly as a business model, um, the game The games themselves are brilliant because not only are they social games. Um, they encourage you to add friends and play with your your Facebook friends. But in addition to that, they want you to you know, spend

a few real life dollars in there as well. I mean you can, you can play without spending any real cash and and in fact I have never spent a cent on any of the games. However, I can tell you that playing it with no or few friends without spending cash makes them maddeningly slow and difficult to achieve anything. They like to encourage you to buy a special building or a specific decoration for your castle slash farm, slash city, slash whatever. Yeah, um, and you know you can. You can.

You can maybe have your friends give you one, or you could you know, spend five dollars and and earn enough in game cash to do that, or or maybe you're building something, a large building in your your world, and uh, you know, if you just fork over a few dollars, it will happen that much faster, and and it makes more in game money than anything else. And the thing is, all of a sudden, you've encouraged your friends to start playing, and they're all spending five dollars,

ten dollars of their money and so on. And so it's a brilliant business model if you can get enough people to do it and you and also they pointed out that once they get this network in place, they don't have to win over everyone who's playing every time, because if they get just a few, If I have a lot of friends playing games on Zinga and then a few of them start playing a new game, that may tempt me to try out the new game game

as well. And so I know, the idea is that once you get that big net of users, that network of users, then you've you've got enough seeds planted Farmville or otherwise to try and convince more people to try out new games as you release them. So even when you get tired of an old game, a new game might come along and you want to play that, And

that did work for a while. In fact, when that article that we were citing earlier, the venture Beat article, when that was written back in two thousand eleven, Uh, Zinga was on the rise. I mean they were doing really really well. Uh they held an i p O and uh and that I p O there their stock was originally that's initial public offering offering, thank you. Uh, they held that back in December eleven. So at the end of eleven they have this i p O. And

originally their stock was priced at ten dollars. By March, that price had gone up to fourteen dollars fifth sense per share, so the stock was was increasing in value. But some stuff has happened since then. One of those things is a pretty spectacular deal that Zinga made with another company called o MG Pop, which created a little game called draw Something. Draw Something was incredibly popular, uh,

Like shortly after it came out. That's pretty much what I heard all of my friends in the tech industry. That's all I heard from them, like on their Twitter feeds and everything. They talked about draw Something and how fun it was and um, and it did have a pretty incredible adoption rate, and oh yeah it was. It was soaring. They were the darling, sudden darling of the UH mobile and online gaming casual gaming thing because basically was a drawing game where the your opponent wasn't actually

your opponent, they were actually working with you. Yeah, essentially. Yeah, So the game was incredibly popular, and so Zinga looked at that and said, well, we should take advantage of this. We should use this capital that we've raised through the I p O and just through our revenues and everything else and UH and purchase this company because it would be a very valuable asset in our our repertoire. And so they did for around a hundred and eighty million dollars.

And the problem was that they bought that company just before it hit its peak in UH in adoption, and then shortly thereafter people began to lose interest in the game through no fault of the game. This is just the way we work as human beings. Like we find something new and fun and we go crazy about it, and then after we get used to it for a while, we just stopped thinking about it so much and we don't use it as much. Um. The same thing is true,

very true with a lot of casual games. In fact, Zinga seemed that over its history, and that's one of the reasons why Zinga releases these games so frequently. It's because you can't just release a game. Even if you created a truly amazing game, like something that someone would play and there'd be nothing but praise said about that game.

It has a shelf life, you know, and and you you might have the long tail experience where you've got people who are finding the game late and adopting it late, but it's never going to be as many or as

intense as that early era when people first discover it. Well, same thing happened with draw Something and so even though it was this phenomenal success at the time when Zinga was looking into buying it, surely thereafter people stopped playing it, or at least huge numbers of people stopped playing it and UH and so it suddenly looked like Zinga had paid way too much money for a company, like they had seriously overvalued o MG Pop when they acquired it.

That's not the only company that Zinga has acquired. They've acquired other companies as well. In their UH. Their quest to succeed as a company. Um and in other cases it's it's kind of similar. In fact, there were ties where Zinga was looking at things like a pop Cap games, UM that was not bought by Zinga. There was another company that swept that up. Yeah. As a matter of fact, Uh, Zinga reportedly made a bigger offer for um the indie legend gaming legend PopCap than uh than Electronic Arts, the

eventual winner did, but they actually turned it down. Uh. And of course now they have gone. By the way. The pop Cap is known for titles like the Jeweled Plants Versus Zombies Zuma and uh you know. They they had made the move from being a computer based developer to the mobile world. Um and uh you know also to um uh also to the social gaming sites you know Facebook, they've you know, but Jeweled Blitz and zooma

Blitz are among the largest, most durable titles that I've seen. Um, you know, come and go on the Facebook platform and uh you know they it was certainly one of those those companies that have proven its ability to create new titles, unlike some other people. UM. So you know that there was definitely something there and uh, despite the bidding war, uh,

and the apparent, according to reports, winner being Zinga. They decided to go with e A. Now why did they decide to go with e A. That's a matter of some debate. It's it's sort of unclear. They haven't said specifically, but rumors, you know, rumors of course spread when something like that happens, and they said, well, you know, maybe there's something there, maybe there's some sort of personal conflict, or maybe they knew something about Zinga, or at any rate,

Zinga in in hit its peak and then dropped. The stock price, dropped, the the adoption rate for the game's dropped. Um. Things just turned for the worst in every way really for Zinga, uh, to the point where I think the lowest price so far as of the recording of this podcast was two dollars and thirty one cents a share. And now remember it launched at ten dollars a year and hit a peak of fourteen dollars and fifty cents a share earlier this year. You know, it hasn't even

been a whole year since that happened. And as of the recording of this podcast, we were recording on October twelve, and this morning, before the the market opened, the price was at two dollars and forty three cents a share. It has dropped since we started recording this podcast to two dollars and four two cents a share. Yeah, so that's actually up it had it had gone down a penny or two below that. Okay, So it's yeah, No, granted, moment by moment this value changes, So it's you always

have to take that with a grain of salt. But but I've heard, I've heard a lot of you know, I was looking into a lot of projections. I was looking to a lot of projections, and most of them had the stock price valued at around three dollars for the next twelve months or so. Now, granted, it took less than twelve months for it to go from fourteen fifty to one, but you know, that's that's sort of

the projections by a lot of analysts right now. And part of that is because there seems to be a decreasing tendency for people to play social games on or games at all, on social networks. There was a survey done in twenty that found that, uh, the fifty six of students who were surveyed in this study said they planned on playing fewer social games in the next year. And uh so that you know, more than half of the students were saying, I don't think I'm gonna be

playing as much. It's just not for me. That was back in So if that trend is more widespread than just among students, then that would suggest that perhaps, you know, social gaming was one of those early distractions that was very you know, had a had a big impact when it first came out, but it's becoming increasingly difficult to replicate that in the social gaming world. That's not to say that someone's not gonna come around and create a

game that just knocks everybody socks off. It may very well happen today or tomorrow or you know, a year from now. But the trend is a decreasing interest in social games in the online platform. Um, there's part of that might be made up for mobile. I mean, you could, you know, if these company are able to really concentrate on the mobile experience, they might be able to recapture that because mobile is still a very popular platform. In fact,

it's you know, increasingly popular. So that might be a way that Zinga can turn things around. Uh, and there are a lot of other ways I mean, I'm not a I'm not a businessman by any stretch of the imagination. So while while Zinga's plight looks great indeed to my eyes, it doesn't mean that Pinkinson team can't turn it around, or perhaps, you know, maybe some other company will come

in and purchase Zinga. I've seen some speculation about Facebook, although at this point I'm wondering if Facebook would look at Zinga and say, this looks like it's something that we would have wanted four years ago, but not now. Yeah. Yeah, Well, there's certainly a lot of intellectual property to be had right there, which often is under some contention as to

whether or not that truly blonds Zinga. But yes, go ahead, yeah no, And and that's you know that this is where we get into that hazy well you know, it's a farm game, so you know who you know, is this sufficiently different enough from that one? Now that that's true? But you know, of course there there are some some more original titles, and uh, you know, I think I

think it's possible that um, that may happen. Although you know, when I happened to go look at the stock price just a moment ago, there is also news again as of the time we're starting this podcast that Mark Pinkis is suggesting he wants to take the company private again. So yeah, there were no there was something else. I didn't mention this when we were talking about it, but

I did. There was another part of that Venture Beat article that was kind of interesting about how the company had made uh some money back in back in two thousand and eight, the revenue for Zinga was around nineteen point four million dollars, but because it was a private company, it didn't have to release the fact that their cost or that their losses amounted to twenty two point one million for the year, meaning that their costs far outweighed

their revenue. But it was a private company, so there was no requirement for them to release that information. But as a as a publicly traded company, you have to do that. So when things are bad, you can't cover it up. You know, you can try and obfuscate it with language when you're doing your press conference and talk about the opportunity you have. If you hear the word opportunity said a lot, that can sometimes be a red flag. I'm not saying it's the red flag in every case.

So if you just recently heard the word opportunity at your all hands meeting. That does not necessarily mean you need to panic, but it's sometimes one of those little words that can indicate that there's uh less than positive things going on on the business side, UM problems, our opportunities. Well, you have to think of it that way, right, I

mean if you don't. If you don't think of it that way, then not only is morale an issue, but you actually do start to sabotage yourself in turning things around. So not to really put down anyone who tries to look at things as opportunities, I actually think that's a pretty positive way to go about it, as long as you're being genuine, right, I mean if you're being insincere

in calling it an opportunity, that's a problem. But if you look at and say, all right, this message that I'm getting here says we're not doing as good a job as we need to. What do we need to do to change to do as good a job? There been some suggestions that ZINGA should cut costs by perhaps uh laying off employees and consolidating departments. One of the flip sides to that is if you start cutting costs.

Then you're also cutting into the resources you have to develop new games, so you're actually making it harder on yourself to create the product that will help make the money that you need to make in order to become profitable again or to to turn things around. So it becomes this kind of domino effect, right. You start to cut costs, you start to lay people off, you start

to consolidate departments. It becomes harder for you to make a good game because it's harder for you to make a good game, fewer people are following you, and so it just you know, continues until your company crumbles away. So it's a really challenging thing. And I don't have all the answers because you know, it's easy to say no, keep everybody make good stuff. Like yeah, that's that's that's

the kind of leadership that doesn't get you anywhere. That's that would be my leadership's style, kind like Homer Simpson, are you guys working? Yes? Could you work harder? I guess so, okay? Do that? That's that's kind of my leadership style, which is why I'm a senior writer. All right, then, uh well, I guess that kind of wraps up where

Zinga is right now. And again this this is a company that's had a real roller coaster story and and some of it's a little shady and some of it's a little uh you know uh on the level of of could this be creating it yet another bubble within the tech industry? Um, it's business. It's business. Yeah, and and it just like any other business venture, you cannot count out a company until it's gone. And even then

sometimes they come back. But so Zinga may turn things around, They might find the secret sauce needed to really get people invested in the company, both figuratively and literally. And uh, you know, maybe it will happen, but it could very well be that this might serve just as a warning to other people who want to launch their own companies. You can see some really uh great success early on if you're doing you know, if you're hitting all the

right beats. But sometimes that that's short term success and it will come at the cost of a long term success. Yes. Um, well we'll wrap that up here. If you have guys, have any suggestions for future episodes of tech Stuff, why don't you send us a little note. You can do that via email. Are address as tech stuff at Discovery dot com, or send us a message on Facebook our Twitter. You can find us there with the handle text stuff hs W and Chris and I will talk to you

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