After Farmville success, Zynga not ready to plunge into mobile

SAN FRANCISCO Tue Jul 10, 2012 8:10pm EDT

The corporate logo of Zynga Inc, the social network game development company, is shown at its headquarters in San Francisco, California April 26, 2012. REUTERS/Robert Galbraith

The corporate logo of Zynga Inc, the social network game development company, is shown at its headquarters in San Francisco, California April 26, 2012.

Credit: Reuters/Robert Galbraith

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SAN FRANCISCO (Reuters) - Zynga Inc CEO Mark Pincus said Tuesday he remains wary of investing as heavily in mobile games as he has in proven Web-based titles like FarmVille despite an industrywide push toward catering to mobile devices.

Game industry observers in recent months have stressed that developers must adapt as Internet users worldwide shift toward spending time on smartphones and tablets rather than desktop computers.

Concerns that Zynga continues to rely too heavily on its Web titles built on top of Facebook's platform have weighed on the stock, which has fallen roughly 50 percent from its $10 IPO price in December.

Speaking at an industry conference in San Francisco, Pincus said it was "obvious" that game companies should be investing heavily in mobile games — Zynga itself splashed $183 million to acquire New York-based game studio OMGPOP in March — but added the company's emphasis remained on Web games, given uncertainties about how the mobile platform will mature.

"We invest north of $10 million in a potential franchise game like the Ville," Pincus said. "We can't make that investment yet confidently in mobile. And I'm confident in the next couple of years we'll get to the point where we can. But it's not there yet and I think it's a little chicken or egg."

Pincus said he was held back by some unresolved questions over the still-maturing mobile platform, such as whether the Adobe Air and HTML5 technologies will become accepted standards.

"We've made a huge investment in mobile, organically building up teams and products and with one large acquisition," Pincus said. "We're at the point where it's obvious that we all should be investing heavily. But I don't think we have that all-in confident moment. The flywheel isn't there in an obvious way."

Pincus's hesitation in the mobile market stands in contrast to Zynga's all-out approach to its Web hits, which feature sophisticated social mechanics that are constantly analyzed and refined by dozens of Zynga engineers even years after they are first released.

Titles like CityVille and FarmVille, built off Facebook's platform, have helped Zynga squeeze $1.1 billion in revenue in 2011 out of an average 223 million monthly active players in 2011.

In a move to wean itself off of Facebook, Zynga announced in June that it would open its platform to encourage independent developers to build games on top of Zynga's own network.

Zynga also unveiled a new slate of games. For its latest offerings, Zynga has poured 100 developers who have worked "well over a year and a half" to ship its new titles "The Ville," a Sims-like social game, and "ChefVille," a kitchen management game, Pincus said.

But any efforts to roll out these games across multiple platforms will prove difficult, if the past were any indication, Pincus acknowledged.

"We were too ambitious at first with FarmVille," Pincus said. "We spent a huge amount of engineering to build a totally synchronous game experience."

(Reporting By Gerry Shih,; additional reporting by Malathi Nayak; editing by M.D. Golan)

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