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Mobile Marketing

App Developer Conversations – How does Zynga impact mobile app developers?

Robi Ganguly  //  August 17, 2012  //  7 min read

We’re kicking off a weekly video series that we’re calling App Developer Conversations this week that features myself, Ian Sefferman of MobileDevHQ and Ryan Morel of PlacePlay. We’ll be focusing on short video conversations about issues facing app developers, new opportunities to promote and monetize your apps and whatever else we think is relevant. Be sure to check out the MobileDevHQ blog and PlacePlay blog to see their videos from each week as well.

This week I led our discussion about Zynga, their mobile strategy and how it impacts mobile app developers. We had a few key takeaways:

  • Zynga’s existing mobile strategy appears to be highly acquisition-focused; it’s unclear whether or not this will lead to long-term success (although we’re skeptical).
  • Having mobile “DNA” is particularly important and we don’t see that being true for Zynga at this time
  • Most mobile app developers have nothing to worry about with respect to Zynga, but if you’re working on games that are similar to their strategy (i.e. Games with Friends) you should probably be a bit more concerned about what you’re working on.

We hope you enjoy this series – please let us know in the comments about future topics you might want to hear about and if you have anything to add to the discussion!

 

The transcript

I’m Robi Ganguly of Apptentive, and I’m here with Ryan Morel of PlacePlay,
and Ian Sefferman of MobileDevHQ. We’re here to talk about app development,
discuss what’s going on and potentially talk about new opportunities. So
quick intro, could you tell us about what you do at MobileDevHQ?

Ian: Yes absolutely, I’m Ian at MobileDevHQ we’re doing apps for
optimization. Which is essentially as SEO for mobile apps. So we help app
developers rank more highly in App Store search.

Robi: Awesome. And how about you, Ryan, what are you working on at
PlacePlay?

Ryan: My name is Ryan Morel, I’m the CEO of PlacePlay. We help app
developers make more money with targeted advertising. It’s really simple.

Robi: Like I said, I’m Robi, with Apptentive. And what we do is help app
developers talk to their customers more effectively. We think app stores
are great for distribution, but they are the last place for customer
conversations. We fix that problem, and get people higher ratings,
downloads, and higher customer retention. So let’s just jump right in to
it. Let’s talk about Zynga. We know their growth on the web is flattening
, and they’ve been saying mobile is a real big growth area in terms of
where people are spending time. But it doesn’t seem like their monetization
strategy is keeping up with that. What do you think the pros and cons are
of their mobile strategies today?

Ryan: I think it’s been interesting, because it’s clearly, up until
recently been a secondary platform for that, right. So as their DAU’s on
the web, going like this? It was like we really don’t need to focus on
mobile, but now the DAU’s for the web are going, “I guess mobile is a much
bigger concern”. So I think that created two problems for them. So one,
it set expectations that were unrealistic. And two there’s no favorite
nation status on mobile. So Facebook, clearly Zynga did do a lot of thing
right, Facebook made them. They had that favored nation status there’s no
way to get it on mobile. So trying to compete fair and square with other
well-capitalized companies that know mobile really well, has clearly proven
hard for them. And I think we are starting to get to a point where we’re
maybe seeing some reactionary moves; as opposed to like strategic moves.
So “Draw Something” was a fantastic game that’s doing really well, but they
may have over payed for that a little bit. Considering what it’s done
since acquiring it.

Robi: What about you Ian?

Ian: I think “Draw Something” is a great example of where Zynga’s doing
wrong. On the web front we can talk about whether or not Zynga’s actually
innovative in their game design, but the [EA suite] has been clear that
maybe they weren’t. But, on the mobile front they I think they didn’t even
try right. Most of their mobile efforts are acquisitions, so they really
have no core DNA in mobile yet. If they want to acquire in order to build
that core DNA then, that’s actually, I think, very smart. If they’re just
acquiring to try to find the next hot thing, it’s never going to work out.
Because at the time you’ve bought it, it’s already going to be on its way
down. So figuring out how they can build mobile into the core DNA is, I
think, their biggest challenge.

Robi: I think that DNA issue is often underestimated in its importance.
So we see lots of game companies and EA’s one of them with a studio
acquisition strategy, right. They’ll buy, oh you’re successful at this you
are developing this, so were going to buy you and bring you in-house, and
then that one time they were successful was really an aberration it wasn’t
consistent. And because it was an internal DNA they don’t know why they
strayed away from success. They don’t know how to lead a company back to
being good at it. I think that’s underestimated, so. I’d be most concerned
with Zynga if I was them about that lack of really understanding and the
feeling around how to do mobile correctly, and how to evolve with it.

Ryan: I think that’s a really interesting point. I’m not trying to
diminish the accomplishments of OMGPOP, because it clearly has a fantastic
game. That company was dead on vines, right. And “Draw Something” was
their hit title. So much like Angry Birds who has parlayed their success,
Rovi was a nobody. And they’ve done a bunch of stuff and it all failed. So
I’m not convinced that those acquisitions and their acquisition strategy is
buying that core DNA. It seems to me like if they went after, I’m giving
Zynga and EA advice. It’s very presumptuous. Like if they went after
somebody like Z2Live here in Seattle or Back-flip or some of these other
guys who were built from the ground up on mobile, that’s probably the way
to get that core team that you guys are both talking about.

Robi: So I think were saying quite a bit about the DNA, their acquisition
strategy may be maybe it’s questionable . Maybe it’s not the best way to
acquire DNA. But if you’re a mobile app developer you’re scared of them.

Ryan: If I was a mobile, no. The only thing I’d be scared of is their
ability to outspend me in these acquisitions. And their ability to get
they’re monetization metrics right. But I’m not sure if it’s there, at
this point. They’re no different than anybody else, right. If I’m a
mobile app developer I’m way more worried about GREE or DNA, or some of
these other guys who are spending huge dollars on these acquisitions.

Ian: Yeah, I actually think that’s sort of dead on. I would be worried
from the standpoint of are they going to artificially going to inflate
prices in ads, in driving user acquisition. I think most mobile developers
especially in the gaming space, have much more to worry about in terms of
building an awesome game then they do in terms of their competition coming.
I wouldn’t worry about Zynga.

Ryan: Sorry for interrupting, I guess the only thing I’d be worried about
is them copying me.

Robi: I think that’s what I was going to talk about. If your mobile app
developer in general, Zynga may not be on the radar, but if you are making
specific types of games. Particularly games that have this with friends
aspect trying to be social and viral in that sense, you’d probably be more
worried. Because if you’re coming with something that you think is
innovative, there’s a decent chance that they’re going to find out they
might copy you or they might come talk to you and you’ve got to be thinking
maybe about those situations six months before. Whereas, most app
developers don’t have to be thinking about that problem.

Ryan: I would say also, and I think we kind of glossed over this a little
bit. That Zynga did really make a good acquisition with Newtoy. That
“With Friends” series is clearly proven to be a good one or them, but maybe
not huge but overall profitable for them. So I guess that would solve for
some of their mobile DNA stuff, because those guys clearly had a bunch of
experience. So, we should be fair none of us are running public companies.

Robi: And to be fair, none of us are running public companies. Right?

Ian: Also true.

Robi: They’re doing a great job. So I like to take the conversation a
little bit back to Facebook, which we talked about on the previous
segment. And one of the things that Zynga really did in order to grow, was
they really understood that the canvas on which you were building your
game, was a place not just to have the game, but to show related activity
from friends and then your friends can bring you back into games. And the
space in Facebook on the web allows for that; but on a mobile device you
know, we are really limited. Do you think that changes the dynamic of how
they’ve been growing? And part of this shift to mobile that’s hard, is
that they don’t have as much space to work with, or that they don’t have as
many as tools that are affective?

Ryan: Yes, I think that’s a big part of it. And as we also talked about
before, while we were talking about Facebook, it’s hard to really
understand how people are engaging with Facebook on mobile. I just don’t
know enough. I know for me, it’s like a quick scan versus the web. It’s
like slow I don’t read everything I don’t look at everything, so it’s a
little different. That takes away a big adherent advantage that they have,
so yes, I think that’s a challenge.

Ian: Ditto. I think, back when Zynga started and was using Facebook
effectively, Facebook was the most spammy site out there, and Zynga was at
the top of that list. Facebook has close that down, and I don’t think that
opportunity will ever presents itself ever again. So, I don’t think Zynga
has that ability to do that again.

Robi: I think one of the interesting things is, that were certainly seeing
really discreet experiences, live on mobile really well. Like “Words with
Friends” is a wonderful example of taking advantage of the fact that you
know people are waiting for the bus, and they have five minutes. It’s just
great for them to be able like “duh, duh, duh”. Then they’re reminded two
hours later by their friend that they have a move to make. I think that
aspect, whether it’s through Facebook or not, that like tying into the
natural windows of opportunity on mobile, seems like a big opportunity.
But, still the prevalence of being reminded, without the space of Facebook
around it seems to be a big challenge.

Ryan: Yeah.

Robi: So that’s our thoughts on Zynga. It’s been a good conversation,
thanks for paying attention.

Ian: We’ve talked a little bit about where we think these changes are
happening, where it’s coming from, why it’s happening.

Robi: So, my personal belief is that some of it is just products age. So
the Kindle Fire at this point, is probably a little long in the tooth. It’s
probably due for a refresh…

About Robi Ganguly

Robi Ganguly is the Co-founder and CEO at Apptentive. He is passionate about giving customers a voice via mobile. Follow Robi on Twitter @rganguly.
View all posts by Robi Ganguly >

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