Zynga China has just commenced its Mobile Publishing Program, looking to find Chinese game developers and companies that want to market themselves abroad. With respect to these developers and their products, Zynga has said that it is looking for a few strict requirements: high quality games only, virtual prop design capability and capacity for overseas operations.
Mark Pincus, Zynga’s CEO and co-founder, recently mentioned that Zynga and Facebook had once considered parting ways in 2010. Yes, nobody would have thought that such a close relationship could break at that time, especially before Facebook’s listing. Given the fact that in 2011, 12% of Facebook’s revenue came from Zynga, and in the first quarter of 2012 this rate increased to 15%, it would be unexpected. 85% of Zynga’s activity comes from Facebook. With such a good relationship, Zynga has a monthly active user-base of 290 million, and in any given moment there are 1 million users playing online, exceeding annual revenues of one billion USD!
Six months before Facebook’s share price spiral, Zynga was satisfied with Facebook. But business is simple when circumstances change: if Facebook active users are reduced, then cash-flows will weaken and have a direct effect on Zynga’s user-base, reducing Zynga’s earnings.
Therefore, after Facebook’s IPO, Zynga released several major new products in June, including several social games and mobile platforms, as well as a series of tools: an API interface aiming to attract third-party mobile developers for an alliance, as well as a “Zynga With Friends” gaming platform on Zynga.com.
Even though the Chinese market is growing independently, it is an incredible temptation for Zynga to grab a piece of the pie as well. Following this thought, Zynga has doubled its team members in China since last year from 80 to 160 members. From this development they are positioning the China team to develop international products.
David Ko, Zynga’s Senior Vice President of Mobile Business, says that Zynga is in the process of opening up to the outside world, inviting game developers worldwide to join in its mobile game projects.
One could say that China’s market and its gaming platforms have already become the crucial keys in Zynga’s strategy. Though it is true that China’s market is great, they should really consider the question of profits. Mobile games are a hot topic, and practically nobody is currently focusing on social games, but is Zynga focusing on the right market?
If Zynga really wants to have a role in platforms and development at the same time, its position will obviously be dominant, as so many are eager to use the Zynga brand, but how will they separate the outcomes? Will Apple, Facebook and Google allow for independent game stores to appear in their own ecosystem? Will developers of games in China be able to meet the needs of overseas consumers? DeNA, for instance, has not yet proven successful in its push to China, so how can Zynga expect that it will be successful pushing Chinese companies overseas?
A lot of our friends remember Zynga’s earliest attempts in the Chinese and Japanese markets and how little success they had. Will they really be able to take Chinese games abroad and convert their platforms?
It will be worth seeing how this goes.
Translated from the Chinese original here.
Written by Dennis Cheng