When it comes to the video game industry, developing games for desktop and mobile platforms could not be more different, which is something that Zynga has realized. With massively popular hits such as Farmville and Mafia Wars, the company had once been at the top of the charts for casual gaming. Unfortunately, they never quite got the hang of making the transition to mobile, which might be why they are now looking for ways to farm more success in that area. After all, even when it comes to Facebook, King.com now holds the ranking for the number one maker of Facebook played games with Candy Crush Saga.
Don Mattrick, CEO of Zynga, expects the first quarter of the year to experience the highest number of losses as they make the game-changing transition into the mobile gaming market. Fortunately, they will not be going in alone as they are buying NaturalMotion, the company behind successful games such as Clumsy Ninja, CSR Racing and Jenga; all for mobile. Other than simply acquiring NaturalMotion’s expertise in this market, they will also be obtaining access to something called Euphoria, NaturalMotion’s revolutionary game engine which gives human-like motions to the characters in Clumsy Ninja.
Acquiring NaturalMotion is not the only change that Zynga has been making. In order to truly farm mobile success it means that the company has also had to undergo restructuring which involved cutting 314 employees. They anticipate that this will them save anywhere between $33 million to $35 million this year alone. However, NaturalMotion has 260 employees of their own, so while Zynga is cutting quite a few jobs, they are also obtaining a large amount of new talent. The change may be necessary for more than just financial reasons as Zynga looks to the future, because successful mobile games are usually created with teams ranging between 10 to 30 people. Until now, Zynga has been used to using teams of more than 100 people to create their Facebook games, which is not unusual for this platform.
Draw Something Good
While Zynga’s new business strategy may seem solid, that is not to say going this direction does not come without any risks of its own. In the land of mobile game development, being a one-hit wonder type of developer is not an unusual concept. Consider the case of OMGPOP who had a six-year dry run before becoming an over-night success with their app, Draw Something; After a mediocre launch, the cast of Jersey Shore and Miley Cyrus ended up playing and tweeting about the game which resulted in a huge number of downloads and caused OMGPOP to eventually be acquired by Zynga for $200 million. Unfortunately, their story did not have a happy ending once Zynga decided to lay almost everyone from OMGPOP off, even after OMGPOP employees attempted to negotiate to buy their company back.
This could mean that Zynga’s new business direction has risks for both parties involved and ironically, the risk is the same for both sides but the outcomes are different. Will NaturalMotion become another OMGPOP that Zynga is uncertain what to do with? The layoffs that Zynga has already gone through suggest that they are planting their seeds deep in the soil and are prepared to wake up as early as possible in order to farm mobile success. With aspirations to release Farmville onto mobile in quarter two already revealed, it appears that Zynga is looking to capitalize on past successes in a new market. Only time will tell if Zynga can get back on their feet in this new landscape and raise some prize crops.
By Jonathan Holowka