1. Zynga-The Winner in Social Gaming
Segment
Zyngais a San Francisco, California; United States based Social Network Game Developer.It
develops browser based games that run as stand-alone and as application widgets on social
networking sites such as Facebook.The most popular games of Zynga are Cityville,
Farmville,Zynga Poker,Frontierville and Mafia Wars.The latest game released by them is
Empires and Allies.
Earlier the trend was to buy DVDs of PC games or Xbox/PSPs,butzynga smartly came up
with simple browser based games that required no initial purchase to start playing the game
assuming everyone had a PC when they started playing.The end user has no compulsion to
pay but he has an option.So what was the breakthrough here? Earlier the PC game industry
was mainly targeted towards smalls kids and young ones.But Zynga thought from a different
perspective and they did alot of research on it and found out two key points.First one was that
the major population in USA was elderly compared to kids and young folks.The elderly
population increased eleven fold between 1900-1994,the nonelderly increased only
threefold.In this century, the rate of growth of the elderly population (persons 65 years old
and over) has greatly exceeded the growth rate of the population of the country as a whole.
The elderly increased by a factor of 11, from 3 million in 1900 to 33 million in 1994. In
comparison, the total population, as well as the population under 65 years old, tripled. Under
the Census Bureau's middle series projections, the number of persons 65 years old and over
would more than double by the middle of the next century to 80 million. About 1 in 8
Americans were elderly in 1994, but about 1 in 5 would be elderly by the year 2030.Second
one was that the major population in USA worked on a weekly basis cheque.Zynga made
sure that they get the most out of this cheque.The game was for everyone.Zynga did the
initial planning and structuring so well that it was bound to make millions.They targeted the
population that was in front of a computer large part of the day like
professionals,housewifes,elderly folks and kids.Zynga games never had any great graphics as
compared to some PC games like NFS,Crysis but still they were a hit because they were
simple to understand,play and to level up and they understood the end user well.People tend
to get bored when they don’t see any achievements or goals being accomplished(typical
human nature),so they structured their games on the basis of that study to make their games
more successful.For example, Mafia wars were set in New York City.The first set of jobs that
were required to do were very simple and very quickly you could level up,get
achievements,skills points increased with the help of which you could have set your
character.Zynga had already very carefully designed the game as such that if there was any
potential buyer,they will buy the stuff on offer to progress in the game like Reward points
and Facebook credits.This was a major Revenue puller for Zynga Games.Here again,they
broke another mental block.Earlier the thinking in masses was to buy a game,finish it and
move on to next game or next part of the game.With the introduction of Zynga games,people

2. actually started to buy stuff for real cash(mainly USD) which gave them a sense of
attachment,urgency,obsession and eagernesss to play more and more(achievement oriented).
The plan payed off.Social gaming is itself a new phenomenon.Zynga games came to the
scene in 2007 when Facebook opened its API to develop games.Since then Zynga has been
on a rocketing growth between 2008-2010,the number of Facebook users has soared to 0.5
Billion and out of which 300 Millions are users of Zynga games.250 Million are active
players of Zynga games every month and out of which 4.5 Millions are Indian users.These
are huge numbers representing players that are “human”.Daily,50 Million users play globally
and out of which 1.5 Millions are Indian users.The numbers are still raising both globally and
in India.Zynga was very quick to understand that India being very large in population has to
be focussed upon more so they announced that India will be a core part of their plans.The
initial charter in Feb 2010 was to scale up and the focus was on technology.They built
membase which is an open source database,from scratch,in India.Membase helps better in
scaling than traditional methods.Zynga is also one of India’s largest online cloud computing
environments and they focus on end to end innovation to grow faster.
Considering the 0.5 Million total users globally and 250 Million monthly active users,Zynga
had many payment options for a global customer like Paypal,Credit Cards,Bank Wire.Same
options were available for an Indian buyer.But in India,we still don’t have many people using
Credit Cards.Those who even own a Credit card don’t use it often like it is used in USA.A
few also think that using your personal information online is not safe.This was kind of a
challenge for the Zynga game makers-How to make there system flexible for Indian buyers
so that they could buy more in numbers? They set up a relationship with MOL for prepaid
cards which has increased their access to pay.
Another great example was set up by the Zynga sales and marketing team by launching Game
cards across the world.In March 2010 Zynga started selling prepaid cards for virtual
currency at more than 12,800 stores across the US. These were available from 5USD to
80USD.This removed the problem for those who didn’t have a Credit card/limits
reached/didn’t wanna use the Credit card.Zynga also has a Platinum Purchase program
allowing members to purchase virtual currency in amounts over $500 at favourable rates by
making a payment via wire transfer.Zynga’s revenues largely depend on small core of large
spenders,known as “whales” in the industry,for the large part of its income.No ordinary
player could attain a platinum program until and unless Zynga offers it to them.It’s for the
“Elite”-those are gaming addicts and pour in more than a 500$(some 1000$) a month.This
program is just a way to reap high revenues for Zynga and for gaming addicts;it’s a way to
feed their obsession.
All in all Zynga was able to do what they dreamt off-Keep the customers happy and MAKE
HUGE PROFITS.In 2009,a Russian Firm,Digital Sky Technologies bought a share of $180
Million share of Zynga.In 2010,combined $300 million from Softbank and Google were
invested in Zynga.Apple also paid a huge sum to put zynga games on iphones.In June
2011,The Wall Street Journal estimated Zynga’s value at $19 Billion.Zynga has been
identified as a possible candidate for an IPO too.Be Evil!