* "Zynga with Friends" to roll out soon
* Can connect nearly 300 million users
* Follows long symbiotic relationship with Facebook
* Shares close nearly 5 pct lower, analysts see growth
By Gerry Shih and Malathi Nayak
SAN FRANCISCO, June 26 Zynga Inc
unveiled a social network for gamers dubbed "Zynga with Friends"
on Tuesday, hoping to wean itself from a longstanding, symbiotic
relationship with Facebook Inc that has shaped two of
Silicon Valley's closely watched Internet companies.
The game publisher, which has been under pressure to reverse
a steep slide in stock price in recent months, said its new
network will pair gamers with opponents and make features like
player profiles, an activity stream and chat available for all
users, regardless of whether they play Zynga games on mobile
devices or on desktop computers.
Zynga with Friends is "one network, one unified experience,
and one social lobby that will for the first time connect all of
our players, no matter where they're playing," Manuel Bronstein,
a senior Zynga executive, told reporters at a press event in the
company's headquarters in San Francisco.
"The new social features and services are designed for the
sole purpose of bringing more people to play together,"
Zynga will also provide programming tools to help
third-party developers publish online and mobile games based on
its own software, executives said, in order to foster a Zynga
"ecosystem" that will expand its slate of titles beyond
mainstays such as "Farmville" and "Zynga Poker."
Still, Zynga shares closed nearly 5 percent lower on Tuesday
as investors saw little in the announcement - which included the
planned social network, as well as a bevy of new game titles -
to drive strong long-term growth.
The company announced "FarmVille 2," a sequel to its megahit
resource management title, as well as "Matching with Friends,"
an addition to a suite of smartphone games that includes the
popular "Words with Friends."
"One of the worries is that the whole idea of social gaming
seems to be waning somewhat," said Paul Verna, a gaming analyst
at eMarketer. "There doesn't seem to be a lot of growth left,
and the idea of unveiling another Ville game or FarmVille 2 - I
don't get the sense that's very exciting to the financial
Zynga's moves, while long expected, have stirred speculation
around the future of its cozy partnership with Facebook, a
company that owed 15 percent of its first quarter revenue to
fees from Zynga. The two companies also confirmed recently that
Facebook has begun showing ads from its inventory inside Zynga
games, which are played by some 290 million people.
Meanwhile, Facebook's reach of close to 1 billion users has
helped distribute Zynga's games and propel the publisher to a
dominant position in the social gaming industry, but analysts
have warned that Zynga needs to seek greater independence to
sustain growth, especially as Facebook's expansion inevitably
Colin Sebastian, an analyst at R. W. Baird, said the Zynga
with Friends network "is a natural step in the right direction
as they leverage their technology infrastructure and user base.
On one hand it might help them become less dependent on
Facebook, but from a practical perspective they will continue to
remain dependent on Facebook for quite some time."
Asked to comment, Facebook issued a statement that betrayed
no concern about Zynga's announcement. "It's exciting to see
Zynga continue to build with Facebook across web and mobile
Responding to questions from reporters on Tuesday, Zynga
executives took pains to stress that the expansion of its own
social network did not threaten its existing relationship with
"We've had a longstanding agreement with Facebook that we
would do these kinds of things," said Reed Shaffner, Zynga's
director of product. "In no way are we trying to use that to say
you have to play on this platform."
"The idea is that we'll help you find the best gaming
friends anywhere you play," he added.
Executives said the platform could potentially have as many
as 290 million users with some 2.8 billion daily social
interactions once it is rolled out, although a launch date was
Zynga acknowledged on Tuesday that it is also trying to
boost mobile usage, targeting a small but faster-growing
wireless device gaming market that is quickly becoming a crucial
battleground for so-called casual or social gaming.
To bolster its mobile offerings, Zynga purchased New
York-based game developer OMGPOP for $183 million in March.
The company said Tuesday it will also team up with Atari SA
to develop games, but did not elaborate.
Zynga executives said they will provide developers a set of
"application programming interfaces" - APIs - to make it easier
for them to craft games using Zynga's software.
"We're opening our doors today and opening Zynga Partners
for Mobile. We are inviting developers from all over the world
to come and join our network," said David Ko, chief mobile
Zynga wants to create an ecosystem with "best-in-class
mobile developers and best-in-class mobile games," Ko said.
The company also announced new titles including ChefVille, a
kitchen management game, and The Ville, a game resembling "The
Sims" that allows users to build homes and dress their avatars
to interact and pursue romantic relationships with other users.
Even so, analysts said Zynga, facing mounting scrutiny from
investors, may need to look beyond its familiar repertoire to
attract new gamers and keep existing ones hooked.
"One area where they may have disappointed people is, they
are not showing any games in development that target a more core
gamer, or so-called mid-core gamer," said Sebastian, the Baird
analyst. "That's something where we've seen a lot of growth for
Facebook, and that's potentially a missed opportunity for