Spending money in mobile games often makes things easier for the player. The same principle doesn’t necessarily hold true for publishers that attempt to “win” the smartphone gaming market by spending money on acquisitions.
Earlier today, Zynga confirmed the resignation of Zynga New York chief executive officer and founder Dan Porter. Former CityVille lead Sean Kelly will step in as general manager of Zynga New York in addition to his role as vice president of mobile games.
This news comes nearly a year after Zynga acquired the developer (then known as OMGPOP) for $210 million based on the success of the Pictionary-like mobile release Draw Something. In the time since that acquisition, Draw Something’s popularity dipped, and Zynga New York failed to retain its large audience of gamers.
Kelly, a long-time Zynga employee, is coming in to fix things. It’s noteworthy that the company decided to replace Porter, who founded OMGPOP/Zynga New York, with someone from the Zynga side and not internally at the New York studio.
“They spent too much on the acquisition,” Wedbush analyst Michael Pachter told GamesBeat. “The game has not grown at all since, so it is not surprising that they would try to reinvigorate the franchise with new leadership.”
Kelly may face an uphill battle on the reinvigoration front.
When Zynga acquired OMGPOP, Draw Something had over 13 million daily active users. It is now down to over 1 million DAUs, according to mobile metrics site AppData. That’s a major leak for one of early 2012’s biggest mobile titles.
“Draw Something’s gone way down,” IDC research manager Lewis Ward told GamesBeat. “But one million daily active users isn’t nothing. It’s enough to keep the doors open.”
At $210 million, Zynga surely needs to squeeze more out of Draw Something than enough revenue to keep the doors open.
Enter Draw Something 2.
The studio already launched the game in the Swedish iOS App Store and plans to release it globally soon. Zynga claims it is “even more social and engaging” than the first. Those are descriptors Draw Something 2 will need if it hopes to attract and retain a major audience.
The first game rose and fell so quickly that it’s hard not to see the Pictionary-game as a fad, but Pachter is ready to see how a sequel will perform.
“If they think they can keep people playing longer with an updated version, it probably makes sense to try,” said Pachter.
A Zynga spokesperson told GamesBeat that the developer focused on improving Draw Something 2’s social features. The studio is positioning it as an Instagram for art. Players can follow and play with their friends, but they can also follow celebrities and talented artists.
This should improve Draw Something 2’s stickiness compared to the original — and it is one of the reasons Ward is feeling positive about the game’s prospects.
“Our research shows that the longer people play a game the more money they spend,” said Ward. “It’s not a radical idea, but there’s a correlation in survey data between time spent playing and how much money players ultimately spend.”
In March, American Idol host Ryan Seacrest Tweeted that he convinced Zynga to give him an early copy of Draw Something 2. He posted Draw Something versions of Idol judges Randy Jackson and Mariah Carey to his feed.
Porter quickly followed up on his Twitter to confirm the game is real.
Zynga confirmed that Draw Something 2 is one of its bigger first-party mobile releases for the first half of the year. Looping in Seacrest to hype it seems like a good start to getting people excited.
With that much at stake, it may explain why the company wants someone else at the helm.
Porter is another name on a tall pile of recent departures from Zynga. Last week, the company’s chief information officer Debra Chrapaty left to take over as CEO at a cloud-storage firm. In August, chief operational officer John Schappert resigned. Other 2012 departures include chief marketing officer Jeff Karp, chief creative officer Mike Verdu, chief security officer Nils Puhlmann, chief technical officer of infrastructure Allan Leinwand, OMGPOP chief revenue officer Wilson Griefel,Words With Friends co-creators David and Paul Bettner, and Zynga chief financial officer David Wehner.
Despite the exit of such key personnel, Zynga managed to generate positive financial buzz when it reported higher-than-expected revenues of $1.28 billion for 2012. That is up 12 percent from the previous year.