Over at Forbes, Dave Thier has written a negative article on Zynga entitled, “Why Zynga is Doomed.”
First of all, great article title. I’m jealous. Secondly, all is not doom and gloom in the world of Zynga. They just raised $1 billion and Mark Pincus and Zynga was on Rock Center with Brian Willams on NBC last night (for the 100 or so people who watch that TV show).
But, Mr. Thier does raise one really good point about Zynga’s future prospects.
The big issue is that “[Zynga] got big under a set of conditions that will never exist again. It’s because every dollar that they make is going to cost them more than the one that came before it.”
He may be correct about this. Zynga got big when it was cheaper to market and virally spread their games on Facebook, when they were the one “game” in town to take advantage of Facebook’s viral channels (which do not exist anymore) and to buy ads (they now have to compete with Electronic Arts and Disney).
In his article, Mr. Thier cites the success of Mafia Wars, a text based interactive fiction game on Facebook that was super successful when it launched with little competition four years ago, and Mafia Wars 2, which launched this year with super cool graphics, but has been a commercial failure (less users than the original as of today).
There are a lot of design flaws in the social violence pieces of the game and based on my experience and that of many of my friends I have talked to, Mafia Wars 2 is just not fun. However, in the past, it would not have mattered. Zynga would have bought its way to success in the game. Today, they can’t.
The Forbes articles ignores the facts that Zynga is investing heavily in expanding off of Facebook and into mobile and has big plans for its own social games network (eventually).
And, Zynga has over a billion dollars as a result of going public to buy their way into new markets and be the leader in social games beyond Facebook.
“Doomed” is perhaps too harsh of a word to describe Zynga’s future prospects, though it did get my attention.