Zynga Lays Off 520 Staff!
As its share price continued to free-fall alarmingly amid reports of more losses, Zynga – the biggest, ugliest heavyweight of Facebook-style social games – announced that it would lay off 18% of its total workforce. That’s around 520 employees.
It’s a shame so many people have to lose their jobs because of mismanagement, but there is very little sympathy for Zynga as a company, with their track record as the biggest copycat around; I guess their latest piece of game theft couldn’t help them out of this hole.
Some see this as a sign that the industry is in trouble, which is not the case. Zynga has just been too slow to move with the times and its lack of creativity and innovation has quickly caught up with them and bitten them on the bum. This is especially ironic as other competing companies like Akamon have risen by essentially copying the style of Zynga games.
CEO Mark Pincus described it as a “hard day” – bless his heart! The reason he gave for the layoffs?
I think we all know this is necessary to move forward. The scale that served us so well in building and delivering the leading social gaming service on the web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played.
Some people weren’t too pleased at finding out they’d lost their jobs by reading social media posts. Former VP of Communications for OMGPOP (bought by Zynga and now being closed down) tweeted:
I learned via Facebook I was laid off today and @OMGPOP office is closed. Thanks @zynga for again reminding me how not to operate a business.
Anyway the lack of urgency to move towards a more mobile focus has cost Zynga (and more importantly their employees) very dearly.
Crowdstar Make the Move
At the same time as we were reading about the decline of Zynga, Crowdstar was announcing that it had raised $12 million of funding and was switching focus to gaming on tablets, away from Facebook style games.
The company presently focuses on female-oriented games like Top Girl, Top Stylist and Mermaid World. Chief Executive Jeffery Tseng, reporting that the company will release two new games later this year under the new approach, said: “We’ve completely switched to mobile and the focus will be on tablets,”
This follows hard on the footsteps of Finnish company Supercell, which started out with a Facebook game called Gunshine in 2011. Changing focus to mobile games like Hay Day and Clash of Clans, in the first quarter of 2013 the company generated $179 in revenue.
Understandably then, this is an attractive model to follow for many development companies who are more agile and more nimble than Zynga.
Making the Transition to Mobile
As the web-based format of social gaming declines and more people turn to their tablets and other mobile devices, how does this affect the games themselves and the developers behind them?
Here are a few of the main benefits of transitioning to mobile:
- Development team size – most mobile games are less involved than console or PC games so they can be created by small independent teams of skilled programmers rather than large teams of 15 to 30 people.
- Lower Budgets – most mobile games have budgets lower than $100,000: much lower than more conventional games.
- Speed of Development – most mobile games can be developed within months. This is a big attraction for many smaller development companies who can get product to market quickly.
- Devices are Networked – tablets and smartphones are essentially small, networked computers, making the social side of games very easy to implement.
- Ease of Getting Started – once listed on the App Store or Google Play, for instance, these games can be downloaded and started within minutes.
It’s easy to see why the dash for a piece of the mobile social gaming market is hotting up; it has many advantages – not least of which is that mobile is where the audience is heading anyway. Comprende, Zynga?