Mark Pincus wants Zynga to reach a billion players. Facebook has been good to Zynga over the past five years, but the social network is not going to give it that many users. To get there, he’s counting on David Ko, the social gaming company’s chief mobile officer.
Zynga has been steadily expanding, buying mobile game companies such as OMGPOP, the maker of onetime mobile sensation Draw Something. Zynga has also opened up a new mobile publishing division so it can publish mobile games made by third-party developers. That way, Zynga can cash in even if its own game designers aren’t the ones to come up with the next Draw Something or Words With Friends.
But ultimately, Ko believes that Zynga will hit its goals if it can establish brands with its mobile games that everyone knows and wants to play. Ko discussed this with Wired Game|Life editor Chris Kohler (pictured right) at our recent GamesBeat 2012 conference, where the theme was the Crossover Era: moving from one segment of the game market into another as a result of marketplace disruption. Here’s an edited transcript of the interview.
Ladies and gentlemen, we’re going to have a fireside chat about Zynga’s mobile business. Here’s David Ko!
David Ko: Hello!
Kohler: Fair or not, GamesBeat has only just begun. And yet I’m already getting a sense from a lot of the presentations here that there are a lot of challenges affecting mobile developers. You hear sentences like, “Of course it’s very difficult to get an app discovered…unless you’re Zynga.” “Of course it’s very difficult to decide what platform to put something on…unless you’re Zynga.” True? Untrue?
Ko: Well, I think it’s a mixture. We announced a new program around publishing to address that. We have been, for I would say the past year, getting lots of inquiries and focus from third-party developers saying, “There’s this real oxymoron in app development today. Through tools that are out there, and through third parties, it’s easier than ever to create apps in the marketplace. And there’s varying degrees of that. But it’s harder than ever to get discovered and to find the right audiences. Are there ways that companies like Zynga and others can help us do that?”
I do think you see a number of companies trying to address this. But I think it’s challenging; as the marketplace and the ecosystem has gotten more competitive, there’s tens of thousands of apps today that are getting submitted. There’s billions of apps now that are getting downloaded each month across multiple platforms. So I do think there’s a challenge there for smaller, independent developers to get their apps noticed. Unless you have a larger network, a larger player base to cross-promote from, it’s very challenging.
Kohler: So what is it that you propose? Because Zynga is essentially moving into this idea of third-party publishing for mobile apps: not simply promoting Zynga stuff, but taking other apps that are out there and leveraging what it is that you have to help them out. What is it you propose doing differently that’s not what Apple is doing with the App Store already?
Ko: For us, it really started with the network. We started publishing on the web in about March earlier this year. If you look at the combined network of mobile and web today on the Zynga Network, there’s about 300 million monthly users. There’s about 65 million daily active users, who we call DAUs. We’ve announced previously that there’s about 21 million on mobile, daily active users, on the average for the quarter. We like to see that as an average.
And then when we think about social interactions, on our network alone there’s over 450 million social interactions per day. So for a while, we were very focused on our own first-party games across mobile and web. Then we saw this opportunity to increase the overall ecosystem for games. Eighteen months ago, we were not that large in mobile. Many of you attended Mark Pincus’s earlier conversation. He talked about us being early [on Apple’s iOS].
That was really 18 months ago, when we first started getting into the mobile gaming space. Today, I think our metrics speak for themselves. We focused on first-party gaming. We view ourselves as one of the largest mobile/social gaming companies that’s out there today. And then what we’ve said is, when we open it up to third-party developers, how do we grow that ecosystem together? We have a network today that’s highly focused on mobile games, and what we want to see is how we take that to the next level. Not really just taking the 21 million that we have today, but how do we grow that pot together?
Kohler: What do you see about five years in the future? As far as mobile goes, how important is it to Zynga? What part of the business is it, and what do you envision as the ideal future for you in the mobile space?
Ko: I think the vision Mark has been very clear on is that our vision is to connect the world through games. We have a mantra that we want to get to a billion players. The reality is that we’ve seen a shift. We’ve seen more of our players come and say, “We want to be able to play your games anytime and anywhere.” Internally, we’ve spoken about how we ultimately, as a company, need to work with the best content creators that are out there, regardless of platform. And so what we’ve done is focus on asking, “How do we focus on getting our content out there across multiple platforms?” And then we really give you experiences tailored to those platforms.
What I do see out there in the future is a shift. I only have to look at my personal habits today. I don’t know if this holds for the majority of you, but I use my personal laptop, if it’s not for work, a lot less. I barely use it during the week. I moved to more of a tablet-centric usage for my own purposes, whether it’s in front of the TV or whether it’s just day-to-day. And I’ve used my phone for almost everything. There will always be that PC experience, but there is the tablet experience that is growing really fast. And then, obviously, there’s the sheer number of mobile phones that are in the marketplace today.
Kohler: During the keynote earlier this morning, Mark mentioned the initial FarmVille move into mobile and how users were ultimately kind of disappointed with that experience. He’d imagined that they simply wanted to play the same game they were playing, just on their mobile device. And he found out, learned the lesson, that in that case that wasn’t in fact what they were looking for. What were the lessons of that process?
Ko: I’ve seen some people say that Mark said we were early to mobile about two years ago. That’s not the case. I’ll just clarify that. The fact that Mark was talking about was that two years ago, we took on an ambitious project with one of our largest franchises to create, I would say, the same type of game experience across mobile and web. Everything is part of a learning experience. What we tried to find was, on the web, with FarmVille, they had an update cadence of updating things multiple times per day.
The way we had architected some of our apps two years ago was that we had made them in a way that, with the updates and the approval processes that are out there today, things would break and lag in the in-between period. Players weren’t getting the best experiences. We’ve learned a lot since then. We’ve learned in terms of how we think server-side versus client-side and how to utilize new technologies like HTML 5. We’ve tailored new experiences for players today and their playing habits. So I’m glad that we made those investments and learned two years ago, because I think it’s made our experiences today that much better for players. You see it across things like Words With Friends, for example, Draw Something, and all the new games that we’ve come up with.
Ko: I think Draw Something, for us, has been similar to Words With Friends. I would say it’s a cultural phenomenon. It was one of those apps where it took the world by storm. We’re right now very close to our 10 billionth drawing on the network, which is just incredible. And in just this short amount of time. What we found was this game went viral; it went all over the world. And it grew, not only basically across iOS and Android and other platforms, it grew because of social. It was easy to play. You could share it and connect, and it was a game that required very little localization. People played it all over the world. Since that time, we’ve tried to make the game a lot better.
What we’ve found is that we really want to create brands in mobile. We want to take this and extend it; we think it can become a brand that has an evergreen character to it. We’re really thinking about our portfolio in that manner. Earlier in the day, Mark talked about when we launch games. For Zynga, it’s really just the beginning. We don’t look at launching games, and then we put them to the side and say, hey, we’re done. When we launch games, this is really just the beginning of an arc, hopefully this long arc that we want to take with the game. Because you want to be social. Inherently, that is the foundation of all games that we build today. We’ve found that focusing on social can move scores like active social network (ASN) that Mark talked about and deliver games that are much longer in arc than, I would say, single-player games.Kohler: Draw Something had this arc where it kind of exploded and then went down after that….
Ko: That doesn’t show the full picture. You referenced that by what you see in Facebook Connect, looking at those data points. The reality is, though, that there’s a huge subset of our users that don’t connect through Facebook. I would say that takes a portion into account. You can also log in through email and use things like your Twitter handle. So there are other ways you can log into the game that aren’t quite being captured. I think that while looking at things like that, Facebook Connect and usages, they’re a great way of seeing a certain perspective, but I think it only tells a piece of the overall story.
Kohler: How do you look at gaming virality in a game’s design? It’s got to go so far beyond, these days, just asking somebody, hey, tweet about this, hey, Facebook message about this high score you just got. At this point, it’s a lot of spam, right? You don’t want the tail wagging the dog. You don’t just want to create this. How do you continue to have people interact with the game when you think about your game design?
Ko: That’s a good question. You’re asking about social. We challenge every game designer, before it comes into what we call our IP process, to tell us why this game is more social or more fun or better quality than any other game in the marketplace. I think there’s a lot of great developers in the marketplace today, but we try to really differentiate ourselves through the social components and the social aspects of the game.
Let me give you an example. One of the games that we just launched was called Zynga Slots. There’s a lot of slots games in the marketplace today. So when the team came and said, hey, we want to build a slots game, there were natural reservations about, well, what’s going to differentiate this game versus every other game in the marketplace. And we made them go back to the drawing board a number of times. What ultimately they came back to us with was a really innovative game that you can go and download today, that centered around social jackpots, that centered around a social lobby, that really brought in your friends. The more friends that you play with, similar to Vegas, your potential winnings get hotter. It integrated things from other characters in other games to the games themselves that unlocked different levels.
When we looked at that game and noticed it was more social in nature than other slots games in the marketplace, and that was a big fun aspect that we saw, that it brought in other characters from FarmVille, for example, and that it was a high-quality game in terms of load time performance. So we start there. There’s so many games, I will tell you, that we shelve today, because there’s so many folks, even in this audience, that can build a better game and we can’t make it more social than what’s out there today. So we’ll scrap it. But when we feel we can differentiate ourselves through a more social experience, that’s where we see our opportunities.
Kohler: Do you think there’s a long-term future for mobile games that don’t have social elements?
Ko: Yeah, we do, but that’s not in our wheelhouse. I think there are lots of developers out there that can build single-player games, and that’s great. That’s why we also did our publishing program. We offered five games in our publishing program initially, whether it was by Atari or Phosphor, and I’m really excited to see some of those games come out. They’re very different from the games that we offer today. The fact of the matter is that we want to make different genres of games available for our players. We recognize that our players want to play a bunch of different games, they want to play games that are like Words With Friends and Draw Something, but they might also want to play heavy 3D kinds of games or physics-based games that we don’t offer today. We want to be able to offer those to them. That’s why we did our publishing partnerships.
Kohler: So is that the idea behind this crossover era? The concept here is, okay, we’ll have the established players in traditional games adapt to the new world of mobile devices or browser games. That’s Zynga’s crossover opportunity, then? You occupy this one space, but clearly there’s more that you could be doing.
Ko: Yeah, I think that’s part of it. “Crossover” could mean a bunch of different things on a bunch of different platforms, but that’s a piece for us. Asking, “How do we grow the gaming ecosystem together as the whole app ecosystem just gets more competitive and more fragmented?” It’s going to get more fragmented before it kind of contracts.
Ko: Absolutely. They play in the office. We’ve got consoles. You’ll see it, hopefully most of you will come to our event tonight at headquarters. There’s tons of console gamers all over the place. We encourage gameplay. We just want to unlock that creativity.
Kohler: What do you think about… The big news story that’s going around today while we’re all here is the startup company Ouya, with the Android-based 99-dollar App Store-style console. What do you think about stuff like that? Taking the mobile market that’s already working in order to shake up the way we play games and transporting that to the living room. Do you think that can change the living room, is it something fundamentally different from your phone?
Ko: I think there’s a huge opportunity there. You see many companies going after this already. Even Apple and others have looked at the market and asked, how can we integrate the console or the TV? I do think what you’ll find is there’s a big opportunity for all of us in tablets today as well. There’s a big push by many companies into the tablet area that’s kind of a nice transition from the PC, as you think about going to your phone. I do think that some of the announcements that we’re seeing, whether it’s about cloud computing or around taking stuff to Android and making it more of a console setup, I think those are all interesting. They’re going to take a little bit more time, I believe, to evolve than some of the things that are right in front of us, but I think that’s great, because it gives you more opportunities to play and use these apps that are on our devices today.
Kohler: What are you looking for from third parties or independent developers who are going to say, hey, maybe Zynga can publish my game? What are you hoping to hear from them about their products?
Ko: I want a lot of them to be excited about being on the Zynga Network. I’ve been there for 19 months now, just trying to build this highly curated mobile gaming social network. When I first came in I wanted to make sure we were able to leverage these amazing things that we had out on the web. We have so many people playing games out on the web, and everyone has a mobile device. We wanted to see how we could bring some of them to mobile, because they were telling us they wanted to play games on mobile. And now what we’re saying is, how do we grow this ecosystem together? The message that we’ve gone out with is pretty simple. We’ve got this base today, we’re open for business, we’d love for you to be a part of it. There are other networks out there today that are trying to do some of the same things, and I think that’s great for developers, because I think having competition or other folks that are trying to make the ecosystem easier for developers will challenge each of us to really think about it from your perspective. And that’s what I find exciting, because that’s going to push each of us to make it more developer-centric. It will make it so that we’re really focused on building a great game or building a great experience, and then all the other stuff, hopefully, we can help that just surface in the background.
Kohler: Is the $60 video game dead? Is there a place for that?
Ko: I’m still spending money on them. I don’t know if it’s dead, but the reality is that the market is evolving. It’s evolving to a place where you have to be somewhat multiplatform. It’s going to continue to evolve and accelerate. I think there was a saying for a while that, hey, it’s the year of mobile. And everyone used to snicker, because everyone talked about that for like five to ten years. But now that day has arrived. The reality is that now we’re going to continue to push on. So I actually think all of these markets are going to continue to evolve.