Zynga
| File:Zynga logo 2022.svg Logo used since 2022, inspired by the founder's American bulldog "Zinga" | |
| Company type | Subsidiary |
|---|---|
| Industry | Video games |
| Founded | April 2007 |
| Founder | Mark Pincus, Eric Schiermeyer, Justin Waldron, Michael Luxton, Steve Schoettler, Andrew Trader |
| Headquarters | San Mateo, California , United States |
Area served | Worldwide |
Key people | Frank Gibeau (CEO) |
| Products | Zynga Poker, FarmVille, Words with Friends 2, CSR Racing 2 |
Number of employees | 1681 (2018) |
| Parent | Take-Two Interactive (since May 2022) |
| Website | zynga |
Zynga Inc. () is a United States-based video game developer and publisher with a specialization in social and mobile gaming sectors. Established in April 2007, the company is headquartered in San Mateo, California. Zynga’s mission centers on leveraging mobile and social platforms to "connect the world through games".
The company rose to widespread recognition following the release of FarmVille on Facebook in June 2009, which attracted ten million daily active users within just six weeks. By August 2017, Zynga reported having thirty million monthly active users. Leading titles during that year included Zynga Poker, Words with Friends 2, and CSR Racing 2, recognized as a top mobile racing game.
Zynga became a publicly traded company on NASDAQ under the ticker symbol ZNGA on December 16, 2011. In January 2022, Take-Two Interactive announced its intention to acquire Zynga for $12.7 billion, a transaction completed in May 2022.
Following this acquisition, Take-Two highlighted that Zynga’s games engage approximately 10% of the global population each month, underscoring its substantial market presence and growth within the mobile gaming industry.
History
Founded in April 2007 by Mark Pincus, Eric Schiermeyer, Justin Waldron, Michael Luxton, Steve Schoettler, and Andrew Trader initially under the name Presidio Media, the company rebranded to Zynga in July 2007. The name derives from Pincus’ American bulldog, Zinga, which also serves as the corporate logo. Zynga’s inaugural game, Texas Hold 'Em Poker (now known as Zynga Poker), debuted on Facebook in July 2007 as the platform’s first game offering.
By April 2009, Zynga had become the leading Facebook app developer with 40 million monthly active users and inaugurated its first external studio, Zynga East, under Brian Reynolds’ leadership. In June of that year, Zynga acquired MyMiniLife, the creator of FarmVille, which by August became the first Facebook game to reach 10 million daily active users. November 2009 saw the launch of FarmVille.com as Zynga’s initial standalone game platform. By February 2010, FarmVille boasted over 80 million players. In May 2010, Zynga and Facebook entered a five-year agreement to promote Facebook Credits within Zynga’s games.
In December 2010, Zynga launched CityVille, which surpassed FarmVille by attracting more than 61 million monthly active users. On July 1, 2011, Zynga filed for an IPO aiming to raise up to $1 billion; at this point, it employed roughly 2,000 staff members. The company commenced trading on NASDAQ on December 16, 2011. Later that year in November, Zynga’s $2.25 billion offer to acquire Rovio Entertainment was declined.
At the June 2012 Zynga Unleashed event, the company unveiled the "Zynga With Friends" network designed to connect players across various platforms and introduced the Zynga API for developers. Additionally, it launched the Zynga Partners for Mobile initiative to enhance its mobile footprint. In October 2012, a partnership with bwin.party enabled real-money gaming offerings in the UK market including online poker and casino games.
Confronted with financial difficulties, Zynga reduced its workforce by laying off 520 employees (approximately 18% of staff) in June 2013 and shuttered offices located in New York, Los Angeles, and Dallas. By July of that year, it had lost nearly half of its user base from the previous year and experienced a $400 million decrease in valuation. Plans for US real-money gaming were abandoned in July 2013 resulting in a share price decline of 13%. Don Mattrick—formerly president of Microsoft Interactive Entertainment—was appointed CEO that month while Mark Pincus remained chairman and chief product officer.
In January 2014, another round of layoffs cut 314 positions (15% of employees). Founder Mark Pincus relinquished his role as chief product officer in April but continued as chairman. First-quarter results for 2014 revealed daily active users had decreased from 53 million to 28 million year-over-year. That same month, Alex Garden joined from Microsoft Game Studios as a senior executive.
Zynga leased office space in Maitland, Florida in July 2014 but closed it within a year. Don Mattrick departed in April 2015; Mark Pincus resumed CEO duties until Frank Gibeau succeeded him in March 2016. Gibeau brought prior experience heading mobile operations at Electronic Arts and joined Zynga’s board in August 2015.
By Q4 of 2017, Zynga reported revenues totaling $233.3 million—a rise of 22% compared to the previous year—marking its strongest quarterly performance in five years. As of January 2018, the workforce numbered around 1,681 employees with approximately eighty million monthly active users and a market cap valued at $3.39 billion. Since its founding, more than one billion individuals have engaged with Zynga’s games.
On January 10, 2022, Take-Two Interactive declared plans to acquire Zynga for $12.7 billion through cash and stock transactions at $9.86 per share. Shareholders approved this merger on May 19; it was finalized on May 23 with Zynga becoming part of Take-Two’s worldwide operations.
During cross-examination at the June 2023 FTC v. Microsoft trial, Microsoft Gaming CEO Phil Spencer disclosed that Microsoft had contemplated purchasing Zynga prior to Take-Two’s successful acquisition bid in 2022.
Funding
During its first financing round in January 2008, Zynga obtained $10 million. By July 2008, the company secured an additional $29 million through investments from venture capital firms. Throughout its initial four years, Zynga accumulated a total of $854 million over three funding rounds, with the largest single round being $490 million in February 2011.
Public offering
Zynga submitted its Form S-1 registration statement to the U.S. Securities and Exchange Commission on July 1, 2011. The company set its initial public offering price at $10 per share and began trading on NASDAQ under the ticker symbol ZNGA on December 16, 2011. The stock initially dropped by 5%, but after Facebook filed for its IPO in February 2012—revealing that Zynga contributed 12% of Facebook’s revenue—the shares surged by 26% to reach $13.39. By March 2012, the share price climbed to $14.50. Despite experiencing early fluctuations, Zynga’s stock recovered in 2017, closing the year at $4.00, marking a 56% increase driven by stronger financial results and renewed investor optimism.
Acquisitions
| Date | Games | Company | New name | Price | Country |
|---|---|---|---|---|---|
| July 2008 | Yoville | cb | USA | ||
| Feb 2010 | Serious Business | USA | |||
| Feb 2010 | Los Angeles, CA
USA | ||||
| Feb 2010 | Bangalore,
India | ||||
| May 2010 | XPD Media | Beijing,
China | |||
| Aug 2010 | Unoh Games | Zynga Japan | Tokyo,
Japan | ||
| June 2010 | Challenge Games | Zynga Austin | Austin, Texas
USA | ||
| June 2010 | FrontierVille | Zynga East | Timonium, MD
USA | ||
| Aug 2010 | Conduit Labs | Zynga Boston | Cambridge, MA
USA | ||
| Sept 2010 | Aves Engine (Game engine technology) | Dextrose AG | Zynga Germany | Frankfurt,
Germany | |
| Oct 2010 | Bonfire Studios | Zynga Dallas | Dallas, Texas
USA | ||
| Dec 2010 | 'Words with Friends'; 'Chess with Friends' | 'Newtoy, Inc.' | 'Zynga with Friends' | 'McKinney, Texas'
USA | |
| Jan 2011 | 'CSI: Crime City', 'Parking Wars', 'Drop7' | 'Area/Code' | 'Zynga New York' | 'New York'
USA | |
| March 2011 | 'MoPets'; 'Madden 2005 and 2006'; 'NASCAR 07'; 'Pirates of the Caribbean'; 'Flowerz' | 'Floodgate Entertainment' | 'Boston'
USA | ||
| April 2011 | 'MarketZero' | 'Austin, Texas'
USA | |||
| Jun 2011 | 'Social browser' | 'Flock' | |||
| March 2012 | 'Draw Something' | 'OMGPop' | '$180 million' | ||
| June 2012 | 'Tomb Raider'; 'Tony Hawk' | 'Buzz Monkey Software' | 'Zynga Eugene' | 'Oregon'
USA | |
| Sept 2012 | 'Lucky Train' | 'A Bit Lucky' | '$20 million+' | ||
| Nov 2012 | 'Battlestone' | 'November Software' | |||
| June 2013 | 'Wizard of Oz'; 'Hit it Rich Slots' | 'Spooky Cool Labs' | |||
| Jan 2014 | 'CSR Racing'; 'Clumsy Ninja' | 'NaturalMotion' | '$527 million' | 'Oxford'
United Kingdom | |
| June 2015 | 'Product Incubator' | 'SuperLabs' | '$1.00' | ||
| June 2016 | 'Dragon Academy' | 'Team Chaos' |
'Austin, Texas' USA | ||
| March 2017 | 'Solitaire'; 'FreeCell'; 'Pyramid'; 'Spider Solitaire' | 'Harpan, LLC' | '$42.5 million' | ||
| Nov 2017 | 'Casual card games' | 'Peak Games' | '$100 million' | 'Turkey' | |
| May 2018 | "Merge" games | "Gram Games" |
'$250 million' |
"United Kingdom, Turkey" | |
| Dec 2018 | "Empires & Puzzles" | "Small Giant Games" |
'$560 million' |
"Finland" | |
| June 2020 | "Toy Blast" | "Peak" |
'$1.8 billion' |
"Turkey" | |
| October 2020 | "Go Knots 3D"; "Tangle Master 3D" | "Rollic" |
'$180 million' |
"Turkey" | |
| March 2021 |
"Echtra Games" |
"$21.1 million" |
"San Francisco, CA"
USA | ||
| May 2021 |
"$250 million" |
"San Francisco, CA"
USA | |||
| August 2021 | "Golf Rival" | "StarLark" |
"$525 million" |
"China" | |
| February 2022 |
"NanoTribe" |
"Germany" | |||
| September 2022 |
"Storemaven" |
"Israel" | |||
| November 2022 |
"Popcore" |
"Germany" |
Business model
Zynga employs a free-to-play approach, earning income through direct credit card transactions and strategic partnerships. Its revenue streams include the sale of virtual items within games, in-game advertising support, and banner advertisements featured on its gaming portals. Additionally, Zynga integrates partner offers into its games, enabling players to accumulate credits by engaging with credit card promotions, completing surveys, or purchasing services, alongside straightforward purchases of game credits.
In March 2010, Zynga introduced pre-paid cards for virtual currency available at retail locations across the United States. Two years later, in March 2012, the company unveiled a dedicated social gaming platform designed to host titles from third-party developers such as Row Sham Bow, Inc and Mobscience. By June 2012, Zynga began incorporating Facebook ads and sponsored stories on its site, sharing generated revenue with Facebook.
Hasbro partnership
Zynga formed a collaboration with Hasbro in February 2012 to create products inspired by Zynga’s intellectual properties. By October of that year, they released eight face-to-face games including FarmVille Hungry Hungry Herd, CityVille Monopoly, and Words With Friends Classic. These Hasbro titles were integrated with Zynga’s web and mobile ecosystems, offering in-game currency that could be used across digital versions of CityVille and FarmVille, thereby enhancing cross-platform interaction and generating additional revenue opportunities.
Customer acquisition
Initially dependent on distributing free products to attract users, Zynga later prioritized substantial marketing investments to expand its audience. By 2017, the company shifted its strategy from solely acquiring new players to focusing on cultivating a paying user base, emphasizing revenue growth rather than user count. Industry observers noted that Zynga’s strategic options encompassed either financing new game development or acquiring smaller studios to broaden its portfolio and appeal to customers—demonstrating a dual strategy of organic growth and acquisitions.
Platinum Purchase Program
In September 2010, Zynga introduced the "Platinum Purchase Program," an exclusive club for high-spending users offering discounted rates on virtual currency purchases. Although it received some criticism, this initiative was regarded as a prudent business move and remained active until October 31, 2014.
Viability
Experts within the industry expressed skepticism about Zynga's long-term sustainability. Ray Valdes emphasized difficulties related to replacing aging game titles, while former investor Tom Bollich highlighted challenges in producing low-cost viral games and retaining customers over time.
In October 2011, The Wall Street Journal underscored Zynga’s heavy reliance on Facebook and a relatively small group of users generating most revenue as potential constraints on growth. Following underwhelming second-quarter results in 2012, analysts questioned the durability of virtual item sales. Analyst Richard Greenfield downgraded Zynga’s rating from "buy" to "neutral."
To counter these concerns, Zynga shifted focus toward launching new web-based, mobile, and multiplayer games while developing gambling products targeted at markets outside the United States. The company also concentrated on increasing advertising revenue, which saw a 45% increase quarter-over-quarter and a 170% rise year-over-year during Q2 2012.
In-game registration
Throughout 2009, Zynga provided players with in-game incentives for enrolling in credit card offers or video rental subscriptions. However, in November 2009, the company eliminated all "lead-generating" advertisements to concentrate on revenue generated by the small fraction—between 1 and 3 percent—of users who purchase virtual goods. Advertisements were later reintroduced but with enhanced content moderation controls.
By early November 2009, approximately one-third of Zynga’s income originated from legitimate commercial promotions such as Netflix subscriptions and marketing surveys that rewarded players with in-game currency. Following user complaints about fraudulent ads, then-CEO Mark Pincus announced the termination and prohibition of Tatto Media, a key offer provider linked to recurring mobile phone charges, and implemented more rigorous screening procedures before publishing offers.
Corporate culture
In 2011, Zynga moved its headquarters to a new location in San Francisco’s South of Market area. The building, dubbed "The Dog House," includes various amenities like a coffee bar, arcade, fitness center, basketball court, and wellness facilities. Founder Mark Pincus sought to establish a "playful gaming atmosphere" embodying a "fantasy land" concept. Employees, referred to as "Zyngites," enjoy benefits such as complimentary gourmet meals, access to an on-site nutritionist, and personal fitness training.
A 2011 article in The New York Times characterized Zynga as functioning like a coalition of self-directed teams managing titles such as FarmVille and CityVille, promoting intense internal rivalry. This environment contributed to employee grievances regarding extended working hours and high-pressure deadlines and was speculated to have influenced strategic decisions including acquisitions like PopCap and MyMiniLife.
In 2017, Zynga made a notable contribution to the University of Southern California aimed at supporting research into social mobile gaming, inclusive game development, and initiatives advancing diversity within the gaming sector.
Zynga.org
Founded in 2009, Zynga.org serves as the company’s nonprofit branch designed to incorporate charitable giving into games such as FarmVille. By 2015, Zynga.org had successfully raised $20 million dedicated to international humanitarian and philanthropic efforts.
Relationship with Facebook
On July 18, 2011, Zynga disclosed details about its collaboration with Facebook in an addendum to its Form S-1, highlighting a five-year exclusive deal established in 2010 for utilizing Facebook credits. This alliance positioned Zynga as a major contributor to Facebook’s revenue stream, responsible for 19% of Facebook’s income in 2011.
On October 11, 2011, Zynga revealed intentions to create its own gaming platform, signaling a strategic shift away from reliance on Facebook.
In November 2012, Facebook terminated its special arrangement with Zynga; beginning March 31, 2013, Zynga operated under Facebook Platform’s standard policies.
In May 2017, Zynga broadened its footprint by launching Words with Friends on Facebook’s Instant Games platform through the Messenger app, demonstrating continued collaboration within evolving digital environments.
Headquarters
In 2010, Zynga leased 270,000 square feet of office space at the former Sega headquarters and subsequently acquired the entire 407,000 square foot building in 2012 for $228 million. By 2016, the property’s estimated value had risen to $500 million. In 2022, Zynga transitioned its headquarters to San Mateo, California.
Active studios
| Name | Overview | Acquisition/Founding Date |
|---|---|---|
| NaturalMotion
(offices located in Brighton and London) |
NaturalMotion, which acquired Boss Alien in 2012, was itself purchased in 2014 for $527 million, bringing Boss Alien under Zynga's umbrella. | 2014 |
| Zynga Chicago | Strengthened social casino portfolio through the acquisition of Spooky Cool Labs. | June 2013 |
| Zynga ATX | Originally known as MarketZero. | April 2011 |
| Zynga Austin | Previously operated as Challenge Games. | June 2010 |
| Zynga Eugene | Formerly Buzz Monkey Software. | June 2012 |
| Zynga India | Based in Bangalore, India. | February 2010 |
| Zynga Ireland | 2011 | |
| Zynga Toronto | Acquired Five Mobile before rebranding. | July 2011 |
| Zynga Turkey | Expanded casual card game market by acquiring Peak Games' card portfolio. | November 2017 |
Former studios
Zynga Seattle Rising Tide Games Zindagi Games NaturalMotion (Oxford)| Name | Overview | Acquisition/Founding Date | Closure Date |
|---|---|---|---|
| OMGPop | Creators of Draw Something | March 2012 | June 2013 |
| Floodgate Entertainment | March 2011 | October 2012 | |
| Wild Needle | Focused on casual games targeting female demographics. | May 2012 | |
| Zynga with Friends | Formerly Newtoy, Inc., headquartered in McKinney, Texas. | November 2010 | June 2013 |
| Zynga Boston | Previously known as Conduit Labs. | August 2010 | October 2012 |
| Zynga China | Originally XPD Media, based in Beijing. | May 2010 | February 2015 |
| Zynga Dallas | Formerly Bonfire Studios. | October 2010 | June 2013 |
| Zynga Germany | (Previously Dextrose AG) headquartered in Frankfurt. | September 2010 | |
| Zynga East | (Located in Baltimore, Maryland). | May 2009 | February 2013 |
| Zynga Japan | (Formerly Unoh Games) based in Tokyo. | August 2010 | January 2013 |
| Zynga Los Angeles | February 2010 | June 2013 | |
| Zynga New York | (Previously Area/Code). | January 2011 | June 2013 |
| Page 44 Studios | September 2011 | ||
|
October 2010 January 2014 | |||
|
September 2015 |
|||
|
February 2016 |
|||
|
January 2014 October 2017 |
Spam concerns
Players frequently had to send invitations or messages to non-players within Zynga’s games to unlock rewards, which led to widespread criticism over excessive and intrusive messaging. Facebook communities opposing the proliferation of Zynga games grew to millions of members, prompting Facebook to revise its developer policies to restrict such outreach. Kotaku attributed a drop in Zynga’s user base during 2010 to these changes limiting notification capabilities.
Intellectual property disputes
Zynga has been repeatedly accused of replicating competitors’ game ideas. The launch of Mafia Wars resulted in a lawsuit from the creators of Mob Wars, which was resolved privately with a settlement ranging between $7 and $9 million. Observers also pointed out significant resemblances between Zynga’s Café World and Playfish’s Restaurant City, as well as parallels between FarmVille and other farming games like Farm Town. Former staff revealed that founder Mark Pincus encouraged mimicking rival games until matching their user engagement.
Multiple developers have publicly alleged that Zynga cloned their titles, including NimbleBit (comparing Tiny Tower with Zynga’s Dream Heights) and Buffalo Studios (Bingo Blitz against Zynga Bingo). Pincus defended the company’s practice by stating it builds upon existing game mechanics. Nonetheless, analysts criticized Zynga for lacking originality, branding it more as a follower than an innovator within the gaming industry.
The company has also pursued aggressive trademark enforcement by filing lawsuits or issuing legal threats against developers using the suffix "ville" in game names. Targets included Blingville, Latman Interactive (Quackville), Night Owl Games (Dungeonville), and Kobojo (PyramidVille). Most of these disputes concluded without monetary settlements.
In 2011, The Learning Company initiated legal action against Zynga over trademark infringement concerning an Oregon Trail expansion for FrontierVille, resulting in Zynga renaming the expansion to "Pioneer Trail". This game was eventually discontinued in 2015.
In a separate case during 2012, Electronic Arts sued Zynga alleging copyright violations related to The Ville, claiming it copied elements from EA’s The Sims Social. Zynga responded by accusing EA’s SimCity Social of imitating its own CityVille. The parties settled in 2013, dropping all claims and covering their respective legal expenses.
Also in 2012, Zynga filed suit against former general manager Alan Patmore over alleged trade secret misappropriation; this matter was resolved the following year.
Throughout these legal challenges, founder Mark Pincus and other executives have maintained that imitation is a common competitive tactic within the industry. Their approach reflects an aggressive business model focused on rapid market expansion by leveraging proven game concepts and employing litigation when necessary to protect corporate interests.
Insider trading allegations
In July 2012, Zynga and several insiders, including its founder Mark Pincus, were named in a class action lawsuit for allegedly selling shares prior to the release of underwhelming Q2 earnings. This lawsuit was resolved in August 2015 with a settlement amounting to $23 million.
By March 2015, a judge permitted plaintiffs to advance claims asserting that Zynga's leadership overstated the company's valuation ahead of its 2011 IPO by hiding deficiencies in its research and development pipeline, user engagement data, and purchasing trends.
Other legal issues
In May 2010, the Norwegian Consumer Council lodged a complaint accusing Zynga of violating the Data Protection Act. This complaint was subsequently referred to the Irish data protection authority because Facebook, connected to Zynga's operations, is based in Ireland.
In August 2010, officials from San Francisco condemned Zynga's guerrilla marketing tactics for Mafia Wars, which involved placing counterfeit currency on sidewalks, an act considered vandalism. The advertising agency responsible for this campaign paid fines totaling $45,000.
Data breach
In September 2019, the hacker group Gnosticplayers announced they had infiltrated Zynga’s Words with Friends database, affecting 218 million user accounts. Zynga confirmed the security incident and disclosed that compromised information included names, email addresses, login identifiers, SHA-1 hashed passwords, password reset tokens, account IDs, and linked social media profiles. Although Zynga did not specify the precise number of impacted users, they pledged to notify those affected. The breach monitoring website Have I Been Pwned? later verified that over 173 million accounts were exposed.
Mobile games
See also
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