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回顾社交游戏公司Zynga创业史(三)

发布时间:2011-12-16 20:30:33 Tags:,,

作者:Dean Takahashi

转折点:真正的游戏设计师

Norwest Venture Partners的风险资本家Tim Chang在2009年秋说道:“现在还很难分析出未来的用户流失率是多少。社交游戏存在一定的用户流失率,就像船底有个洞。但是船只移动速度相当快,以至于你未曾发现有水渗入。”(请点击此处阅读第一第二第四、第五、第六部分

Zynga发现尽管《FarmVille》轰动了市场,但是其面临的挑战是如何继续前行,如何用新游戏吸引那些因厌倦老游戏而流失的用户。公司明白,尽管可以实现在1周内增加上百万玩家,但是这种情况并不能长久维持。

公司在印度设立工作室,部分原因在于公司想要让自己的雇员能够每天都回家,在大型游戏发布期间可以暂时将他们手上的跟踪责任递交给其他同事完成。

这种措施对不断成长的大型游戏公司来说非常重要,看看EA早期的境况便可知晓。EA经常让员工加班,导致员工对公司的厌恶,甚至有个女员工将自己称为“EA Spouse”。Erin Hoffman随后透露,EA Spouse代表所有工作时间过长的EA雇员发表抗议。随后整个行业进行了充分的调查和自省,EA不得不面对由此产生的诸多法律问题并被迫减轻员工压力。

Zynga也有可能面临同样的问题,因为公司在游戏中添加了新代码,用于分析玩家每日的行为数据。设立印度工作室正属于预防措施。

随着Zynga的成长,公司也意识到需要招募更多的人才来制作游戏。随着越来越多的视频游戏行业资深人士走向公司,Zynga也获得业界越来越多的尊重。有趣的是,甚至连Hoffman都最终走向了Zynga。

Brian Reynolds是Zynga声誉成长的原因之一。Reynolds是传统游戏开发者,受过游戏行业泰斗Sid Meier的指导,与后者配合制作过《文明》、《文明2》、《盖茨堡战役》和《半人马座阿尔法星》等游戏。2000年,他离开Meier的公司,成为Big Huge Games的首席执行官,随后制作了即时战略游戏《国家的崛起》。2008年,该公司被THQ收购。

brian_reynolds(from interactive.org)

brian_reynolds(from interactive.org)

Bing Gordon将Reynolds引荐给Mark Pincus,Pincus认识Reynolds,因为他在年轻的时候很喜欢同自己的侄子玩即时战略游戏。

Gordon在2010年秋的采访中说道:“Mark是个《国家的崛起》粉丝,就这样Brian Reynolds来到了Zynga。”

Reynolds于2009年6月30日加入Zynga,在马里兰州巴尔的摩市成立新游戏工作室Zynga East。他成了Zynga的首席游戏设计师,招募了许多之前的同事创建起成熟的游戏开发工作室。

Reynolds说道:“我的工作是寻找可以运用到社交游戏中的优秀游戏设计技术,做些新颖的产品。”

Reynolds帮助Zynga挽回公司在游戏设计师心中的形象。2010年2月,Reynolds在拉斯维加斯一年一度的游戏开发者集会Dice Summit上发表了有关Zynga的演讲。当时,Zynga的产品占据Facebook前10名产品中的6位,月活跃用户超过2.39亿。仅《FarmVille》就是逾7900万用户。Reynolds在游戏开发者群体中有一定声望,他的演讲展现出Zynga友好的一面。正是在此次盛会上,Zynga的Mark Skaggs被评为最佳社交游戏设计师。

Reynolds向与会者讲述了游戏玩法和玩家动机以及与这两者相关的话题。他描述了社交游戏的运作原理。他表示,羞耻感成了驱动人们不断回到《FarmVille》等游戏中的原因,因为没有人希望让好友看到自己的农场破败不堪。

Reynolds表示,将主机系列游戏移植到新社交平台上却没有设计某些适合Facebook用户的内容,这完全是毫无意义的举动。这种演讲对那些想要趁着社交游戏的盛行而淘金的开发商极有帮助。Reynolds在大会上表达了自己的看法,但是许久之后才揭示自己正在进行的工作。他说道,自己相信主机游戏和社交游戏能够并存,社交游戏不会成为硬核游戏的威胁。

他认为,自己从传奇游戏设计师Sid Meier处学到的想法仍然适用于Zynga的项目。Meier喜欢尽可能快地构建原型,然后根据用户的行为来改善游戏,Zynga的做法也是如此。同时,在传统游戏设计和社交游戏设计两个领域中,不可对用户提出的意见过于重视,这也是很重要的。以《文明》系列游戏为例,如果设计师满足每个玩家提出的要求,游戏就会拥有累赘的功能,使玩家对游戏的微管理方法变得单调乏味。

在Reynolds加入Zynga之后,许多著名游戏制作者也纷纷进入公司。2010年春,Steve Chiang成为公司游戏工作室领导人。其他加入公司的明星开发者包括前EA和Westwood Studios资深人士Louis Castle(游戏邦注:此人刚刚于近期离开Zynga),在微软关闭制作《帝国时代》的Ensemble Studios后担任Zynga顾问的Bruce Shelley。

与Facebook之间的“古巴导弹危机”

Zynga_Facebook(from vator.tv)

Zynga_Facebook(from vator.tv)

《FarmVille》展现出了病毒式营销的强大力量,Zynga可以通过游戏网络来进行交叉推广,在短时间内将新游戏转变为市场巨作。但是Facebook用户开始抱怨称,他们从玩游戏的其他Facebook用户处收到的推广信息数量过多。于是Facebook对此采取了严厉措施,关闭了将游戏通知发到Facebook用户主更新页面的功能。Facebook也对平台上的其他病毒性交流形式进行限制。

上述做法的结果是,Facebook从用户处收到的有关游戏推广的抱怨减少,但是游戏应用的用户量急剧下滑。2010年春,Zynga在短时间内损失了千万用户。于是,之前不需要做广告的应用开发商现在需要通过广告来营销,而这份广告盈利直接落入了Facebook的口袋。事实上,Zynga不得不开始给Facebook支付更多的金钱。在这个Facebook“后病毒时代”,Facebook游戏公司的运营模式效力已经减弱,风险资本家开始转投更多的手机游戏公司。

随即,新的变故发生。Facebook要求Zynga使用新的Facebook Credits虚拟货币作为Facebook游戏中唯一的虚拟交易货币。Facebook从虚拟商品交易中收取30%的回扣。有些人认为,平台拥有者肯定会设定税费,这种情况是无法避免的。30%的比例与苹果对App Store中应用销售的资费比例相同,也是微软从Xbox Live在线游戏销售中的抽成比例。

Facebook的Deborah Liu辩解称,引进通用货币的作用类似于欧洲发行欧元。这使得不同国家的用户可以在该社交网络上使用相同的货币,而且可以通用于所有的应用中。Facebook声称,这会让玩家更有动力在应用中付费。而且,还能够使国际化交易更加简单。

但是30%的费用比例并不受开发商欢迎,因为Zynga已经习惯于仅向Facebook上的其他虚拟货币供应商支付10%的费用。5月7日,有消息称Zynga准备发布名为“Zynga Live”的网站,作为公司旗下社交游戏的门户网站。Mark Pincus召开全体员工会议公布了这个计划,公司同Facebook间的紧张关系在会议上表露无遗。

前Zynga内部员工说道:“当你在其他人的平台上运营时,危机就会时刻存在。我们是两家共同成长的公司。Facebook对自己的实力不了解,我们也不知道要怎么做。Facebook担心会过于依赖我们,这是就会产生争端。”

Zynga已经创建了FarmVille.com,并计划发布Zynga Live这个承载公司游戏的自有网络。对于行业中的某些人来说,如果Facebook想要以广告和Facebook Credits为中心建立切实可行的业务模型,那么Facebook的这项措施是必要的。Zynga的措施也是有意义的。如果想要让产品面向全体用户,就必须脱离Facebook。

但是,双方的纷争对两家公司都不利。对于Facebook来说,Zynga是只能下金蛋的鹅,他们的游戏能够留住用户。对Zynga来说,Facebook是个必不可少的市场,使公司可以接触到数百万的潜在玩家。

在此期间,Pincus发表言论,提醒Facebook要将注意力放在最擅长的事情上,也就是构建社交网络。

Pincus说道:“Facebook正处在十字路口。他们必须决定成为网络上的社交平台是否是件更为重要的事情,也就是让他们的社交管道遍布全球,比如通过Facebook Connect等更为开放的技术和通信基础结构进行扩张。这就好比成为在线世界的水管工。如果我正处在他们的位置上,我的目标就是成为社交平台。他们必须决定是要成为社交管道还是成为门户网站。我希望他们能够找到围绕社交管道构建起的业务模型。”

他补充道:“社交游戏目前的发展方向应当是成为网络上的开放Xbox Live。如果我们能够获得成就,有始终如一的用户体验,网络出版商和站点能够参与其中,开发商能够以简单的方式创造出令人惊异的游戏体验,用户间的关系通过游戏得到加强,那么我相信社交游戏最终将成为网络上少数能够让用户获得真实体验的产品之一,成为一项庞大的业务。”

削减Facebook Credits交易

Owen Van Natta当时正在Zynga就职。他之前担任过MySpace首席执行官和Facebook首席运营官,在后者的工作时间为2005年9月到2008年2月。Van Natta很了解Zuckerberg和Facebook其他雇员。他正是Mark Pincus需要的那种顾问,能够帮他处理Facebook Credits谈判问题。

2010年2月,Zynga声称公司已正式将Van Natta聘用为高管,双方之前已有过多次接触。

Owen Van Natta(from venturebeat)

Owen Van Natta(from venturebeat)

在与Zynga的对话中,Facebook表示半数API调用来自Zynga游戏。这意味着,Facebook上的半数游戏活动来源于此合作伙伴。同时,Zynga声明称,公司正花费大量广告资金来吸引Facebook用户体验公司的游戏。Facebook难道真得想要排挤自己的首要合作伙伴吗?为何Facebook不将Facebook Credits的抽成比例定为3%-4%,向其他虚拟商品交易供应商看齐呢?

Facebook正在进行自我反思。但是Mark Zuckerberg曾提及一点。Facebook不会像中国大型社交网络和游戏公司腾讯那样发展,随着时间推移拥有越来越多自身的游戏。腾讯的生态系统中内容不断增加,但是,Facebook始终只是个社交网络。Zuckerberg表示,Facebook不打算自行制作游戏,公司没有足够的资金来这样做。这便是Zynga的核心竞争力。网站必须依靠Zynga来提供最为流行的应用,所以不会将Zynga排挤出去。

5月18日,Facebook和Zynga暂时化解了Facebook Credits问题谈判陷入的僵局。双方声称已经达成了5年战略合作协定,期间内将在社交网络上互相支持。在此协定下,Zynga同意扩展Facebook Credits的使用范围,最终公司旗下游戏在Facebook上只使用这种货币来进行虚拟商品交易。Zynga同意在每次虚拟商品交易中向Facebook支付30%的全额交易费用。

Facebook和Zynga表示,此次协议对双方都有好处,而Zynga似乎已经撤销了让游戏脱离社交网络和加大对其他游戏网络投资的威胁。双方表示,协议主要解决的是Facebook Credits的问题,结果是Facebook不会削减Zynga的交易费用比例。事实情况的确如此。

但是,还有个协议未被两家公司提及。在这份协议中,Facebook承诺将营销平台并让用户数量成长,这样Zynga旗下游戏才能不断获得新的用户。Zynga的义务是,只要Facebook向Zynga提供足够的用户数量,Zynga同意自己的游戏只在Facebook上运营。其他游戏公司根本无法与Facebook达成类似的协议。

2011年7月,几乎所有的Facebook应用开发商都被要求转向使用Facebook Credits。Zynga、CrowdStar和其他开发商很早就为使用Facebook Credits铺平了道路,因而他们愿意在被强制要求之前就向Facebook支付30%的交易盈利。合约可以解决由此带来的部分问题。Zynga还成功地让Facebook与之谈判,因为公司探索到了其他运营选择,可以减少其对Facebook的依赖性。但是不久之后,双方找到了双赢的方法。

Mark Zuckerberg(from venturebeat)

Mark Zuckerberg(from venturebeat)

在这场风波结束后,科技博客TechCrunch曾撰文指出,Facebook Credits争端就像技术领域的古巴导弹危机。Gordon对这种说法表示同意。在2010年秋接受VentureBeat的采访中,Gordon说道:“在电子游戏业务出现之日起,内容发行商和平台公司之间摩擦不断。我们在电子游戏领域看到的情况是,随着时间推移,这种摩擦逐渐缓和。构建稳定关系的最简单方法是,让双方都能够在市场中坚持住。发行商和平台公司的首选做法就是相互帮助共同生存发展。”

Zynga和Facebook之间关于Facebook Credits的协议细节公开一年多后,其他游戏开发商开始觉察到问题。他们得知任何公司都无法在Facebook Credits问题上获得特殊关照,甚至是Zynga也不例外。但是Zynga成功地让Facebook做出妥协,以换取公司接受Facebook Credits,30%的费用对Zynga来说显得更加合意。Zynga仍旧显得不慌不忙,该公司在2011年4月前完成向Facebook Credits的过渡即可。而且,Zynga仍然向Facebook独家提供游戏。

《FrontierVille》改变Zynga

尽管Brian Reynolds是Zynga的首席游戏设计师,但是其有些想法似乎并不出众。他在巴尔的摩的团队开发过各种各样的想法。《Fashion Wars》没有取得成功,《Civ Wars》也没有。即便他是游戏行业的资深人士,也需要花

些时间来探索正确的社交游戏之路。

在他进入公司大约1年之后,Zynga于2010年6月9日发布了Reynolds的首款成功游戏《FrontierVille》。他负责的Zynga East团队有16名雇员,所以相比Zynga之前的游戏来说,这款游戏花费了更多的时间和金钱。即便如此,这样的团队比起其他公司的主机游戏团队来说仍然较小,后者通常需要上百名开发者参与。

从某个方面来说,这款游戏极为关键。Facebook当年早期限制了病毒性渠道,使Zynga失去了数千万玩家。2010年4月20日,当时Zynga的月活跃用户为2.52亿。但是在《FrontierVille》发布之时,公司月活跃用户数量已下滑至2.16亿。公司必须采取措施来挽救这种局面。

Zynga在《FrontierVille》中呈现出的内容几乎无懈可击。这是款原创游戏,与Zynga之前制作的其他游戏截然不同。游戏的主题是开荒,玩家在荒野中建立家园,努力将其发展成熙熙攘攘的边境小镇。这是款家庭游戏,不只有照顾作物和培育家畜的内容,还要用枪支打败邻居守卫家园。

Reynolds曾经是个偏向硬核内容的设计师。在他为设计师Sid Meier工作时,总是很乐意在游戏中添加原子弹等内容。但是现在他已经变成了休闲游戏行家,对Zynga提升实力和吸引新用户来说至关重要。

《FrontierVille》的深度位于其社交游戏玩法中。在《FarmVille》中,好友可以帮助你照顾农作物,而你或许对此从不在乎。但是帮助他人是《FrontierVille》游戏玩法中的关键内容。你可以帮助好友照顾作物、喂养动物、砍伐树木和复活枯萎的作物。你可以抚养自己的家庭、照顾作物、将恶棍赶出领地、添加邻居并通过帮助他人来提升声望。

Reynolds在VentureBeat的采访中说道:“在这款游戏中,你可以更为简单地查看帮助你的人。这个行业教我学会寻找些简单的内容并让玩家以深层次的方法进行互动。目标在于提升社交体验的质量。”原创是Reynolds坚守的原则。

当《FrontierVille》发布时,马上就吸引了大量的用户,但是随后增长又趋于平缓。问题在于,团队中没有专注于用户数据的分析师,所以从根本上来说,只是一些设计师在闭门造车。随后,当Zynga最终为《FrontierVille》配备全职分析师时,用户量又开始上升。游戏用户量随后攀升至3000万,使之成为公司最大的游戏之一。

创造Zynga新企业文化

《FrontierVille》的成功和Reynolds的游戏开发者团队帮助Zynga弄清楚了自己的身份。随着公司的盈利不断增加,可以雇佣更多新的开发者。Playdom等竞争对手也已经筹集资金,他们可以以相对便宜的价格收购那些受经济危机影响的游戏工作室。所以Zynga认为自己也需要做同样的事情。

受经济危机影响的游戏工作室很多。Zynga最早会查看数百家之后才决定收购。最后,其收购游戏工作室的速度达到每月1家。Zynga的雇员速度也在快速增加。2010年7月,迪士尼决定以7.632亿美元买下Playdom。现在,Zynga不仅需要同EA竞争,还要同迪士尼战斗。

Zynga没有能够与其竞争对手相抗衡的品牌,公司拥有的资源就是人力。2009年3月,Colleen McCreary成为Zynga的首席人力官。这位EA前人力资源主管表示,当公司成长如此迅速且收购如此多新游戏工作室时,构建企业文化并非易事。但是她感觉公司的团队间存在共同点。

McCreary说道:“我们有大量充满激情的员工,他们都很愿意在这个新兴领域中努力。他们在其他地方选择了这份职业,并将社交游戏视为下个流行之物。”

McCreary的团队用核心原则来创造更优秀的公司文化。让人们尽其所能快速工作的唯一方法是激励他们实现公司的核心理想。

McCreary自己是在听取了Bing Gordon的意见后加入公司。她此前同Mark Pincus有过3个小时的谈话,但她拒绝了Pincus转投EA。但是Pincus仍然与她保持联系,在4个月后再次尝试,后来她终于接受了邀请。

她在2010年秋天的采访中说道:“他保持与我的联系表明了他渴望我能加入Zynga。他希望我能够为公司找到最棒的人来构建产品。他希望我们能创造出任何硅谷CEO都想要的东西。对于初创公司来说,你雇佣的前20个员工是好友。接下来雇佣的80个人就是你需要用来完成工作的成员。我们的公司已经发展到如此之大,所以我们必须弄清楚要如何扩张和管理。”

随着Zynga不断成长,公司会接受那些被EA等公司裁员的员工。传统游戏开发者喜欢到Zynga工作,因为他们认为这样就有机会接触到新的用户群体。这些开发者在大型团队中只扮演着很小的角色。但是在Zynga,10到25人的团队在3到6个月内就能够制作出游戏。就Reynolds的情况而言,McCreary表示Zynga在他身上冒了很大的风险,在长期的实验和失败后依然相信他能够制作出很棒的产品。

但是Zynga属下的雇员都压力重重,其工作节奏可以说是惩罚性的。未能达标的员工会感受到很大的压力,对他们来说,要么作出成绩,要么就只能离开公司。

Zynga需要对自己的雇员负责。Kleiner Perkins的合作伙伴John Doerr说服了Pincus采用“目标和关键结果”,Google和英特尔使用的就是这种管理方式。Pincus让他的员工写下每周的三个目标,然后在周五审查他们的完成情况。Pincus表示,这让员工专注于工作。这个系统帮助公司淘汰了表现较差的员工,同时也使他们脱离无关紧要的事情。

有些人将Zynga视为“草根Google”。意思是,公司确实向雇员提供了免费食物之类的福利,但是其福利并不像搜索巨头那样好。

一段时间后,雇员们开始产生疑问,在Zynga究竟要如何发展下去。如果软件工程师想要继续发展的话,他的下个目标是什么?在数个月的时间内,Zynga就解决了这个问题,包括让员工将20%的工作时间花在未来的目标和替代者的培训上。直到2010年秋,Mark Pincus还在花时间同McCreary探讨Zynga每个雇员的发展目标。虽然Pincus很忙,但是他在工作时间总是待在公司,这样员工随时都可以与他交流。McCreary表示,当Zynga出现不高兴的员工时,Pincus也会变得忧心忡忡。

对于那些感觉工作时间过长的员工,尤其是在游戏发布之时,Zynga总是努力让他们得到放松。公司会将工作暂时递交给在印度的工作室,让员工休息片刻。随后,Zynga透露在公司工作不足1年的员工比例为64%,不足两年的比例为92%。尽管如此,许多员工都愿意继续待在公司,即便在Zynga的工作很艰难,但是员工可以获得大量的升迁机会和季度奖金。他们还看到Zynga未来的发展前景,看到自己将来的高薪之日。(本文为游戏邦/gamerboom.com编译,拒绝任何不保留版权的转载,如需转载请联系:游戏邦

How Zynga grew from gaming outcast to $9 billion social game powerhouse

Dean Takahashi

A turning point: Real game designers

Tim Chang, then a venture capitalist at Norwest Venture Partners, said in the fall of 2009, “It’s hard to tell for now what the real churn rate will be. Social games have churn rates. You have a hole in the bottom of the boat, but the boat is moving so fast that you don’t see it taking on water.”

Zynga discovered that while it had a huge hit with FarmVille, the challenge was to keep it going and to come out with new games that made up for the users that it lost each week as players tired of older games. It learned that while it could add millions of players in a week, its launches could go even smoother.

It added an office in India in part because it wanted its employees to be able to go home for the evening and hand off their monitoring responsibilities to someone else during a big game launch.

That kind of move was very important for a large and growing game company, given what had happened earlier with Electronic Arts. EA had earned a reputation for putting its workers through “crunch time” so often that it got hit with an employee revolt, started by a woman who called herself “EA Spouse.” Later revealed as Erin Hoffman, EA Spouse spoke up on behalf of all of the overworked EA employees. A full-fledged investigation ensued, the whole industry went into a phase of introspection, and EA had to deal with lawsuits and was forced to ease up on the throttle.

Zynga was vulnerable to the same problem because the company was shipping new code for its games on a daily basis. Opening an India office was an attempt to forestall a revolt.

As Zynga bulked up, it also realized it needed to get more talent for making games on board. And as it hired more and more veterans of the video game industry, Zynga got more and more respect.

Interestingly, even Hoffman eventually went to work at Zynga.

Brian Reynolds was one reason for Zynga’s growing respect. Reynolds was an old-school game developer, trained by game industry legend Sid Meier in the creation of games such as Sid Meier’s Civilization, Civilization II, Sid Meier’s Gettysburg, Sid Meier’s Alpha Centauri and others. In 2000, he left Meier’s company to become chief executive of Big Huge Games, which went on to create the Rise of Nations real-time strategy game. The company was acquired by THQ in 2008.

Bing Gordon introduced Reynolds to Mark Pincus, who knew his name because he loved playing real-time strategy games with his nephews when he was younger.

“That is how Brian Reynolds got here, because Mark was a Rise of Nations fan,” Gordon said in an interview in the fall of 2010.

Reynolds joined Zynga on June 30, 2009, with the aim of starting Zynga East, a new game studio based in Baltimore, Md. He became Zynga’s chief game designer and recruited many of his former colleagues to create a full-fledged game development studio.

“My job is to see what good game design techniques I can bring to bear on social games and to do new, innovative stuff,” Reynolds said.

Reynolds helped Zynga rehabilitate its image among game designers. In February, 2010, Reynolds gave a talk about Zynga’s practices at the annual Dice Summit, an exclusive gathering of game developers in Las Vegas. At that time, Zynga had six of the top 10 games on Facebook and had more than 239 million monthly active users. FarmVille alone had more than 79 million users. Reynolds commanded a lot of respect among game developers and he put a friendly face on Zynga. At that same conference, Zynga’s Mark Skaggs (pictured right in red) collected the award for Best Social Game.

Reynolds could talk to the crowd in terms of game play and the motivations of gamers — topics that they could relate to. He described how social games worked. He said that shame was a good motivator to get people coming back to games like FarmVille, since you didn’t want your friends to catch your farm looking run-down.

“Welcome to the web,” Reynolds said. “The whole game is sitting on servers in a room. You have control of the entire game at all times. The metrics are available in real-time.”

Reynolds said that it made no sense to mindlessly port game franchises from the consoles to the new social platforms without designing something that worked especially well with Facebook users.

This sort of talk was helpful to game developers who wanted to cash in on the social gaming gold rush. But for Zynga, trotting out someone like Reynolds was a powerful expression of its respectability and an equally powerful recruiting tool. Reynolds made the rounds at the conferences, but he didn’t reveal what he was working on until much later. He said he believed that console games and social games would coexist, and that social wasn’t a threat to core games.

The ideas that Reynolds learned from legendary game designer Sid Meier still apply at Zynga, he said. Meier liked to build a prototype as quickly as possible, then improve it based on what users do, and it’s the same at Zynga. At the same time, in both traditional design and social design, it’s important not to overvalue with users say they want. In the case of the Civilization games, for example, if the designers followed every player request, the games would have become overloaded with features and forced players to micromanage the game in a way that became tedious.

After Reynolds joined, so would a number of other famous game creators. Steve Chiang joined in the spring of 2010 to become head of the company’s game studios. Other star developers who joined were Louis Castle (who recently left), a former Electronic Arts and Westwood Studios veteran, and Bruce Shelley, who became a consultant for Zynga after Microsoft shut down his own Ensemble Studios, which made the Age of Empires games.

The “Cuban Missile Crisis” with Facebook

FarmVille showed the power of viral marketing, where Zynga could cross-promote its games across its network and turn new games into instant hits. But Facebook users began to complain that they were getting too many spam messages from other Facebook users who were playing games. Facebook cracked down on the game spam, shutting down game notifications that were sent into the main news feed of Facebook users. Facebook also limited other forms of viral communication on its platform.

The upshot was that Facebook got fewer complaints from users about the game spam, but the usage of game apps dropped dramatically. Suddenly, in the spring of 2010, Zynga was losing tens of millions of users. One of the results was that app makers who previously didn’t have to advertise now had to do so, and the ad revenue went straight into the pocket of Facebook. Zynga effectively had to start paying Facebook more money. At this point, in Facebook’s “post-viral era,” the business models for Facebook game companies weren’t looking so good, and venture capitalists started funding more mobile game companies.

Then another shoe dropped. Facebook came to Zynga and said that it would require the company to use its new Facebook Credits virtual currency as the sole virtual money for transactions involving Facebook games. Facebook would get a 30 percent cut of the virtual goods transactions. Some saw this as an inevitable move by a platform owner to set up a tax. The 30 percent was the same cut that Apple took for apps sold on its App Store, and it was what Microsoft took as its share of Xbox Live online game sales.

Facebook’s Deborah Liu argued that the introduction of a universal currency would be much like the impact of the euro currency in Europe. That allowed people to use the same currency in different countries, and with Facebook Credits, users would be able to use the same Credits currency across all Facebook apps. Facebook contended this would give gamers more liquidity and incentive to spend money across a lot of apps. It would also make it easy to do international transactions.

But the 30 percent fee didn’t go over well, given that Zynga was used to paying just ten percent to other virtual currency providers on Facebook. On May 7, news broke that Zynga was preparing to launch a web site dubbed Zynga Live that would serve as a portal for its own social games. Mark Pincus called an all-hands meeting to tell his staff about the plans, underscoring the tension with Facebook over Facebook Credits. The tension in the meeting was palpable.

“When you operate on someone’s platform, it’s a continuous crisis,” said one former Zynga insider. “We were adolescents growing up together. Facebook didn’t know its own strength, and we didn’t know how to behave. Facebook was worried they were getting too dependent on us. It was like growing up with a best friend. You get into a fight.”

Zynga went so far as to create FarmVille.com and was planning to launch Zynga Live, a web site that would have taken Zynga’s game to a Zynga-owned network. To some in the industry, Facebook’s moves were necessary for Facebook to establish a viable business model built around ads and Facebook Credits. Zynga’s moves made sense as well. If it was ever going to go public, it had to diversify away from Facebook.

But the showdown was a kind of brinksmanship that threatened to destroy both companies. For Facebook, Zynga was the goose that laid the golden egg, keeping Facebook members on the site. And for Zynga, Facebook was an indispensable market, providing access to millions of potential players.

In a speech given during the time, Pincus warned Facebook to focus on what it did best: the plumbing of the social platform.

“Facebook is at a crossroads,” said Pincus. “They have to decide whether its more important to be the web’s social platform, to make their social plumbing pervasive,” presumably through an expansion of more open technologies and communications infrastructure such as Facebook Connect. “It’s sort of like being the plumber for the online world. If I were them, my goal would be to be the social platform. They have to decide to be the plumbing or the portal. I hope they find the business model around the plumbing.”

He added, “Where this ought to go is it should be an open Xbox Live for the web. If we get to this place where there are achievements, a consistent user experience, a way for web publishers and networks and sites to participate, and an easy way for developers to develop amazing game experiences that enhance relationships among people, then I think social gaming can end up being the few real consumer experiences on the web and be a massively large business for all of us.”

Cutting the Facebook Credits deal

Owen Van Natta started showing up at meetings at Zynga during this time. He was the former chief executive of MySpace and the former chief operating officer at Facebook, where he served from September 2005 to February 2008. Van Natta knew Zuckerberg and other Facebook employees well. He was just the kind of advisor that Mark Pincus needed to deal with the Facebook Credits negotiations.

Zynga announced in February, 2010 that it had brought Van Natta on board as an executive, though he had been going to meetings a lot earlier than that.

In talks with Zynga, Facebook revealed that 50 percent of all application programming interface (API) calls were from Zynga games. That meant that half of Facebook’s activity was based on a single partner. Zynga, meanwhile, noted that it was spending an enormous sum of money on ads to try to recruit Facebook users to play Zynga games. Did Facebook really want to squeeze out its No. 1 partner? Why shouldn’t the amount that Facebook collected from Facebook Credits be more like 3 percent to 4 percent, which was what other virtual goods transaction vendors charged?

Facebook was doing its own soul-searching. But Mark Zuckerberg figured out one thing. Facebook itself wasn’t going to be like Tencent, a giant Chinese social network and game company which owned more and more of its own partnership entities over time. Tencent was grabbing more and more of the stack in its ecosystem. Facebook, on the other hand, was the social pipe. Zuckerberg concluded that Facebook wasn’t going to make its own games. It didn’t have the wherewithal to do that. That was Zynga’s core competency. It had to rely on Zynga to provide the most popular applications, so it couldn’t put Zynga out of business.

On May 18, Facebook and Zynga stepped back from their tense nuclear standoff over Facebook Credits. They announced that they had entered into a five-year strategic relationship that ensured mutual support for each other on the social network. Under the deal, Zynga agreed to expand its use of Facebook Credits and eventually use only that currency for virtual goods transactions on Facebook.

Zynga agreed to pay Facebook a full 30 percent transaction fee on every virtual goods purchase.

Facebook and Zynga said the deal would be good for both companies, and Zynga appeared to stand down from its threat to pull its games off the social network and invest heavily in other game networks. The companies said the agreement focused on the topic of Facebook Credits and that there was no special deal that Facebook cut for Zynga in that agreement. That part was true.

But there was another agreement the companies didn’t talk about. In that deal, Facebook promised to market its platform and grow its user base so that Zynga would always have fresh users for its games. For its part, Zynga agreed to make its games exclusive to Facebook as long as Facebook delivered certain user numbers to Zynga. No other companies were able to strike a similar deal.

By July 2011, almost all Facebook app developers would be required to switch over to Facebook Credits. Zynga, CrowdStar and other developers paved the way by using Facebook Credits early, thereby

willingly paying 30 percent of their transaction revenues to Facebook earlier than they had to do so. The contractual matter solved some of the problems. Zynga also brought Facebook to the negotiating table because it exploited its other options for reducing its dependence on Facebook. But after a while the companies figured out how to align their own self-interests.

After it was over, Mike Arrington of TechCrunch said that the dispute over Facebook Credits was like the Cuban Missile Crisis of tech. Gordon agreed. In an interview in the fall of 2010 with VentureBeat, Gordon said, “In all the years of the video game business, there has been natural friction between content publisher and a platform company. We saw in the video game business that, over time the friction got smoothed out. The easiest way to build stable relationships is to have people on both sides that persist for a while. The No. 1 trick of the publisher and the platform company is to survive together for a while.”

When details of the Facebook Credits deal between Zynga and Facebook became public more than a year later, other game developers were steamed. They had been told that nobody got a sweetheart deal on Facebook Credits, not even Zynga. But Zynga extracted some concessions out of Facebook that made its acceptance of Facebook Credits and the 30 percent fee more palatable to Zynga. Still, Zynga was in no hurry: It would be April 2011 before Zynga completed its transition to Facebook Credits. And Zynga kept making exclusive games for Facebook.

FrontierVille changes Zynga

As chief game designer, some of Brian Reynolds’ ideas at Zynga weren’t going so great. His team in Baltimore was working on a variety of ideas. One game called Fashion Wars didn’t work out. Nor did Civ Wars. Even with seasoned game veterans, it took time to get social games right.

Zynga launched Reynolds’ first successful game, FrontierVille, on June 9, 2010, about a year after he joined. His team at Zynga East had 16 employees, so the title took a lot more time and investment than many of Zynga’s previous games. Even so, that team still far smaller than what other companies needed to create console games, which typically had more than 100 developers working on them.

The game was critical in one respect. Facebook’s move to curtail game spam earlier that year meant that Zynga was losing players by the tens of millions. On April 20, 2010, Zynga had 252 million monthly active users. But by the time that FrontierVille launched, Zynga’s numbers had fallen to 216 million monthly active users. It needed something to reverse the slide.

In FrontierVille, Zynga had produced what nobody could criticize. It was an original game, unlike most other games Zynga had created. That was a major milestone at the time. It had a frontier theme where players created a homestead in the wilderness and had to grow it into a bustling frontier town. It was a family game, more about tending crops and livestock than it was about shooting guns off and scalping your neighbors.

Reynolds was as hardcore as they came. He used to delight in setting off nuclear bombs in his game demos while working for designer Sid Meier. But now he had become a casual game maven, essential to Zynga’s mission in raising the bar and attracting new audiences.

The depth of FrontierVille was in its social game play. In FarmVille, your friends could help you tend your crops and you might never pay them much attention. But helping others was key to the game play of FrontierVille. You could help your friend tend crops, feed animals, chop trees and revive withered crops. You could raise your family, tend crops, chase varmints off your land, add neighbors and raise your reputation by helping others.

“In this game, you can see who is helping you more easily,” Reynolds said in an interview with VentureBeat. “What I was taught was to take a lot of simple pieces and have them interact in deep ways. The goal is to improve the quality of the social experience.”

Reynolds described the game as “Oregon Trail meets Little House on the Prairie meets FarmVille.” Being original was part of Reynolds’ charter.

When FrontierVille launched, it saw a lot of user traction right away, but then usage flattened out. The problem was that the team didn’t have an analyst focused on looking at user data, so there were basically a bunch of designers flying blind. Then, when Zynga finally put a full-time analyst on FrontierVille, usage started taking off again. Then it soared past 30 million users, making it one of the company’s biggest games.

Creating Zynga’s new culture

The success of FrontierVille and Reynolds’ team of game developers helped Zynga figure out its identity. As the company grew its revenues, it was able to pick up lots of new developers. Rivals such as Playdom had raised money as well and they were able to start acquiring game studios — already battered by the recession — relatively cheaply. So Zynga decided it needed to do the same thing.

There were plenty of distressed game studios. Zynga looked at hundreds of them before it acquired one. Eventually, it ramped up to where it was acquiring game studios at a rate of one per month.

Zynga added people at a fast rate too. Then, in July 2010, Disney agreed to buy Playdom for $763.2 million. Now not only did Zynga have to compete against EA, it also had to fight against Disney.

Zynga didn’t have any major brands to compete against its rivals. All it had were its people. Colleen McCreary became Zynga’s chief people officer in March 2009. The former human resources executive for Electronic Arts said that it wasn’t easy to create a common corporate culture when the company was moving so fast and acquiring so many new game studios. But she felt like the team had something in common.

“We are a large, motivated group of people who are excited about being on the cutting edge of something new,” McCreary said. “They built their careers elsewhere and see this as the next big thing.”

McCreary’s team pulled together some core principles for creating a better company culture. The only way to get people working as fast as they could was to empower them and make the company live up to its core ideals.

McCreary herself joined after taking a suggestion from Bing Gordon. She talked with Mark Pincus for three hours, and she felt like it was almost like a mutual therapy session. She turned Pincus down to take a job in India for EA. But Pincus stayed in touch, and after four months he tried again. This time, she accepted.

“It said something about his desire that he kept in touch,” she said in an interview in the fall of 2010. “He wanted me to find the best people to come in and build product in a motivated way.

He wanted us to create what every CEO in Silicon Valley wants. At a startup, the first 20 people you hire are friends. The next 80 are those you need to get the work done. At some point, we get so big that we have to figure out how we will scale and manage.”

As Zynga was growing, it could pick up workers from places that were laying them off, like EA. Traditional game developers liked Zynga because “it was a chance to connect with a consumer that they never had.” Those developers had small roles on huge teams. But at Zynga, a team of 10 to 25 people could create a big game in three to six months. With Reynolds, McCreary said Zynga took a big risk on him, trusting him to produce something wonderful after a long time of trial and error.

But employees were under stress at Zynga, where the work pace was punishing. People who didn’t meet the standards were under the whip. They had to perform or leave.

Zynga held its employees accountable. John Doerr, the Kleiner Perkins partner, convinced Pincus to adopt O.K.R.s, or “objectives and key results,” a management technique used at Intel and Google.

The company as a whole and every group within it has one objective and three measurable key results. Pincus asks his people to write down three priorities for the week and then see how they did on Friday executing them. It keeps people focused and keeps them from burning out, Pincus said. That system helps weed out the poor performers, but it also keeps them from getting distracted with too many things that don’t matter.

Some people viewed Zynga as “Ghetto Google.” That meant it had perks like free food for employees, but the perks weren’t quite as nice as the search giant’s. Still, Zynga picked up the tabs for employees’ laundry or dry cleaning.

“We don’t want a sense of entitlement and we want people to be scrappy,” McCreary said. “And we are not Goo Hoo Soft.”

After a while, employees started asking what a career path was like at Zynga. If a software engineer was going to move up, what was the next step? Within a few months, Zynga prepared its career path, which involved getting people to work 20 percent of their time on future goals and to train their replacements. In the fall of 2010, Mark Pincus was still spending hours with McCreary going over the goals of each individual employee at Zynga. While Pincus was busy and could be tough, he held office hours so that people felt free to drop in on him. When Zynga has unhappy employees, Pincus gets very involved, McCreary said.

For those who felt overworked, especially at launches, Zynga tried to get relief. It could hand off work to its India office and rotate people through shifts. Later on, Zynga would reveal that 64 percent of its employees had been on board for less than a year, and 92 percent for less than two years. Many of them stayed on, though, even though Zynga was a tough company to work for, because they got lots of promotions and quarterly cash bonuses. They also saw a big payday coming in Zynga’s future, as it was getting into a good position for an initial public offering. (Source: Games Beat)


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