Zynga

Zynga was founded in April 2007 by Mark Pincus, with founding team members Eric Schiermeyer, Justin Waldron, Michael Luxton, Steve Schoettler, and Andrew Trader, under the name Presidio Media. The company name changed to Zynga in July 2007. Zynga was named after Pincus' American bulldog Zinga and uses an image of a bulldog as its logo. Zynga's first game, Texas Hold 'Em Poker, now known as Zynga Poker, was released on Facebook in July 2007. It was the first game Facebook introduced on its social networking platform.

Zynga became the Facebook app developer with the most monthly active users in April 2009, with 40 million people playing its games that month. Soon after, the company opened its first external game studio in Baltimore, Zynga East, led by Brian Reynolds.

In June 2009, Zynga acquired MyMiniLife which built and launched FarmVille on Facebook. By August, Farmville was the first game on Facebook to reach 10 million daily active users. On November 23, 2009, FarmVille.com went live as Zynga's first stand-alone game. In February 2010, Farmville had over 80 million players, and on May 18, 2010, Facebook and Zynga entered into a five-year relationship to expand the use of Facebook Credits in Zynga's games.

In December 2010, Zynga's game CityVille surpassed FarmVille as its most popular game with over 61 million monthly active users and a base of over 16 million daily active users.

Zynga filed with the U.S. Securities and Exchange Commission (SEC) to raise up to $1 billion in an initial public offering on July 1, 2011. At the time, the company had 2,000 employees. On November 28, 2011, the Finnish game developer Rovio Entertainment rejected an acquisition attempt from Zynga worth $2.25 billion. Zynga began trading on NASDAQ on December 16, 2011.

Zynga acquired four game development companies, Game Doctors, developer of Zombie Smash, Page44 Studios, HipLogic and Astro Ape Studios. On June 26, 2012, during the Zynga Unleashed conference, Zynga announced the "Zynga With Friends" network, aiming to connect players of Zynga game titles across multiple platforms. Zynga also announced the Zynga API, intended to help developers build social games. The company announced that three new partners were developing games for Zynga.com including 50 Cubes, Majesco and Portalarium. The company unveiled the Zynga Partners for Mobile program to help increase Zynga's presence on mobile devices.

In October 2012, Zynga announced a partnership with bwin.party, an international real-money gaming operator, to launch real-money gaming in the UK, including the release of online poker, a suite of 180 casino games, and the first online FarmVille-branded real money slots game during 2013.

On June 3, 2013, Zynga announced layoffs of 520 employees—roughly 18% of its workforce—and closed offices in New York, Los Angeles, and Dallas. By July 2013, Zynga had reportedly lost nearly half of its user base from the previous year. Consequently, investors decreased Zynga's valuation by $400 million. On July 25, 2013, Zynga said it would not be pursuing real money game production in the US. Following this announcement, shares dropped 13%.

Public offering

On July 1, 2011, the company filed its Form S-1 registration statement with the U.S. Securities and Exchange Commission (SEC). Zynga was priced at $10 per share and began trading on NASDAQ under ZNGA on December 16, 2011. The stock closed down 5% on its first day, then climbed 26% to $13.39 per share after Facebook's IPO filing on February 1, 2012 (Facebook had reported that 12% of its revenue comes from Zynga). In March 2012 ZNGA was trading at $14.50. For several years the stock performed poorly, but in 2017 the price hit a three-year high. By the end of 2017 Zynga's shares were trading at $4.00, a 56% gain for the year.

Business model

Zynga uses a "free-to-play" business model. Revenue is acquired via direct credit card payments and partner businesses. It sells in-game virtual goods as people play its games, supports in-game advertising, and it has banner advertising around its game portals.

In addition, Zynga games are linked to offers from several partners. Players can choose to accept credit card offers, take surveys or buy services from Zynga's partners in order to obtain game credits. Players may also purchase game credits directly from Zynga. In the game, players can purchase the points for a fee. In March 2010 Zynga started selling pre-paid cards in the US for virtual currency.

In March 2012, Zynga launched a separate social gaming platform, which included publishing other developers to the Zynga.com platform. Early third-party developers included Row Sham Bow, Inc and Mobscience. In June 2012, Zynga started running Facebook advertisements and sponsored stories on its website. The revenue was split between Facebook and Zynga.

Reception and controversies

Spam concerns

Many of Zynga's games involve players posting messages to non-players, often for in-game benefits. Many non-players have notably complained about such communications created by those games that appear to them as "spammy." Peter Jamison described Zynga's communications as a "deluge" of "unwanted gifts or requests for neighborly 'help'". Facebook groups created to express displeasure regarding overexposure of Zynga's games attracted millions of members. As a result of this, Facebook modified their application developers policy to prevent applications from sending messages to news feeds of friends or submitting updates to the notifications bar. Kotaku attributed a decline in users of Zynga games in April and May 2010 to the removal of Facebook notifications.

Intellectual property infringement

Zynga has been accused several times of copying game concepts of popular games by competing developers. The launch of Mafia Wars sparked a lawsuit from the makers of Mob Wars. An attorney for Psycho Monkey, the creators of Mob Wars, said that in making Mafia Wars, Zynga "copied virtually every important aspect of the game." The suit was settled out of court for $7–9 million. An Ars Technica column said that Zynga's Café World and Playfish's Restaurant City were "nearly identical"; Café World was released six months after Restaurant City. Its gameplay, design, graphics, avatars, and even in-game items are almost identical to the ones in Restaurant City. In addition, journalists have remarked that Zynga's FarmVille is similar to Farm Town, another Zynga game, with Peter Jamison calling it "uncannily similar."

In September 2010, SF Weekly reported that an employee recalled Mark Pincus advising him to "copy what [Zynga's competitors] do and do it until you get their numbers." NimbleBit founder Ian Marsh has accused Zynga of copying its award-winning Tiny Tower game to create Dream Heights. Within a week, Buffalo Studios alleged that its game Bingo Blitz was copied by Zynga in making Zynga Bingo. Pincus responded by saying that tower-building games have existed since SimTower (1994) and that Zynga uses mechanics and ideas developed throughout the history of video games to create the "best-in-market games." He added that Bingo Blitz has similarities to the discontinued Zynga game Poker Blitz. In response, Marsh argued that other tower games like SimTower and Tower Bloxx are substantially different from Tiny Tower and Dream Heights, and that Zynga copied Tiny Tower's "core gameplay mechanics and rules" and tutorial steps. Inside Social Games writer Pete Davison said that although Zynga's The Ville is "not a complete clone" of The Sims Social, it was "very similar."

Zynga founder Mark Pincus has dismissed the criticisms, saying that competing video game makers have always released similar titles for each genre of game. The managing director of Lightspeed Venture Partners, Jeremy Liew, said that creating similar competing games has "always been part of the game industry." Following Zynga's January 2012 release of Hidden Chronicles, Paul Tassi of Forbes wrote that Zynga "refuses to innovate in any way, and is merely a follower when it comes to ideas and game design." In September 2009 Zynga was threatened with legal action by Nissan for using its trademarks in the game Street Racing. Zynga subsequently renamed and changed the thumbnail images of all cars that were branded Nissan and Infiniti to "Sindats" and "Fujis" with the thumbnails changed. At the time it also renamed and redesigned automobiles depicted as being made by GM, Ferrari, Lamborghini, Saab, and others. In September 2009, Zynga initiated trade secrets lawsuits against Playdom and 22 other rivals, including Green Patch which Playdom acquired in November 2009. These lawsuits were finally settled in November 2010. In October 2010, Zynga was criticized on Hacker News and other social media sites for having filed a patent application relating to the ability to purchase virtual currency for cash on gambling and other gaming sites. Commentators said that significant prior art exists for the concept.

In January 2011, Techdirt reported that Zynga sent a cease and desist letter to Blingville alleging trademark infringement for its use of the letters "ville" in the name of a proposed Facebook game. Blingville filed a suit for declaratory judgment that it did not infringe on a Zynga trademark. As reported in Gamasutra, Jay Monahan of Zynga responded by saying that Blingville's "[use] of the name 'BlingVille' is an obvious attempt to capitalize on the fame and goodwill associated with Zynga's family of 'ville' games which includes FarmVille and CityVille".

In November 2011, Inside Mobile Apps wrote that Zynga's lawyers demanded that mobile game developer Latman Interactive abandon its trademark registration for the game Quackville. Night Owl Games has also filed a lawsuit for declaratory judgment that its game Dungeonville does not infringe any Zynga trademarks after Zynga protested Night Owl's registration of the Dungeonville trademark. In May 2012, Zynga sued Kobojo for trademark infringement for calling one of its games PyramidVille. In October that year Zynga and Kobojo settled the suit with neither party making any payment as part of the settlement.