
Mark Pincus, Founder of Zynga, Is Replaced as CEO Again - pavornyoh
http://www.nytimes.com/2016/03/02/technology/mark-pincus-will-again-leave-zynga-ceo-job.html?ref=technology&_r=0
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zekevermillion
Zynga needs another hit. Perhaps they should sponsor a sort of games XEROX
PARC within Zynga to attempt a more speculative and R&D-based approach. From
my non-insider perspective, Zynga is not investing anything new in terms of
intellectual or human capital. They are depleting their existing assets, just
as they are wringing cash from their physical real estate. The company is
currently being run like an old hotel that is no longer stylish, but can still
produce some net cashflow as long as necessary repairs are neglected.

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tixocloud
True for most gaming companies. Always a big challenge of figuring out the
next big hit. You're always only as good as your previous hit.

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PakG1
This is exactly why I don't understand why people buy publicly traded video
game stocks. Nintendo, I can understand. They're a platform company. Their
ability to make money depends on overall industry trends and the ability of
other companies to do the heavy lifting of outputting hits. Although even
they're a bit strange in that they depend a lot on a portfolio of homegrown
titles.

But normal game companies? Especially casual game companies? Do people really
have that much faith that Candy Crush and the like is more than a generation's
flash in the pan like Tetris, Pogs, or Tamagotchis?

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yomly
I'm not sure I am comfortable with Tetris being lumped with the other fads
named here...

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mr-ron
It was a one hit wonder hit, which is what OP was referring to.

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quicklyfrozen
Tetris, having sold more copies then the next 9 top games combined, across
multiple platforms and many years, is certainly not a "flash in the pan".

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PakG1
Fair enough, but I think Candy Crush and others have reached that status too,
no, across multiple mobile platforms? My point is that although Tetris is an
undeniable classic much cooler than Candy Crush, it didn't cross generations
very well.

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speeder
I am a game maker by heart, and got in and out of the game industry multiple
times, and I keep in touch with some people (ranging from the nobodies that do
important work, like Dice and Maxis engineers, to sometimes having a facebook
chat with a celebrity, like John Romero)

One thing that is common, is that everyone that knows how the game industry
work, always keep pointing to Zynga that they are doing it wrong, but they
don't change their ways, and keep doing it.

Yes, game industry IS hit driven, and this does lead to some problems
(example: Maxis was VC funded, investors were expecting their growth to be
stable, not a roller coaster, after the massive hit that was SimCity 2000,
they had no time to outsell SimCity 2000 the following year to keep a growth
pattern, VC didn't understood that and the end result was them being sold to
EA). But even then, on long term is obvious that a company experience and
solidity is more important, for example Bethesda, that uses the terrible and
buggy engine Gamebryo, although I am one of the voices that keep asking them
to change, I suspect the reason why they can crank games with similar quality
every time, is BECAUSE they never changed their tools, and make all games
similar to each other. Another RPG example is Obsidian, that for each game
used wildly different tech, yet all their games are known to have a certain
baseline quality that came with experience. Or for a mobile game company, Toca
Boca, all their games have a distinct style of theirs, and they have a clear
process on how games are created.

Zynga got one part right, that is to "fix" the hit driven problem by having
some stability with their "average" releases, the part they got wrong is that
they do that by just copying everyone else games, and copies rarely do great,
specially in time consuming games.

When WoW appeared, and MMORPG making became a mania like tulip-mania, with
investors throwing money at MMORPG companies with little thinking, I warned
lots of people that making a WoW copy would never work, WoW is a time
consuming game, if you make a clone, why the person would play the clone? a
WoW fan will keep playing WoW, and someone that don't like WoW, won't play the
clone.

Every single company I knew, that attempted to make a MMORPG after seeing WoW
success (instead of making the game a MMORPG because it made sense) was a
failure, I know investors that lost millions with this, and I know people that
accepted a proposal I vehemently reject that got problems too. (one company
approached me, and asked me to drop out of college to join their MMORPG team,
the company owners visited Blizzard headquarters, were mesmerized, and wanted
to copy it, but doing a christian MMORPG, I flat out refused, the company
somehow went bankrupt only 3 months later).

Zynga needs to start doing serious game R&D (instead of making lots of
clones), and also find their own style of games to create consistently, and
find their average revenue to size the company according to it...

If you have a hit, just store the cash, many, many game companies of all sizes
learned the hard way that growing after a hit can result in you having to be
forcefully shrink again to pre-hit levels, usually in a painful manner that
might make you lose lots of money.

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humbleMouse
Zynga has 900 million cash in the bank and just sold their headquaters. If
they are not total idiots they should be able to keep the lights on and paying
developers for a while. That's why I think their stock is a deal @2$/share.

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JonFish85
Maybe I'm misunderstanding what you're saying, but if you say their future
involves burning through their cash-on-hand just to keep the lights on, why is
the stock worth _anything_ to you?

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humbleMouse
My point is that I think it's a good bet that they make at least one more game
that people like at some point in the future. If they spent 50 million dollars
a year running their business they will be around for another 20 years, and in
that time span the chances are good they will make another decent game. Then
when their stock jumps I will sell it for a healthy cash out.

Another scenario is that they get acquired by a different company. In this
scenario it is also likely their share price would jump and I would cash out
as well.

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Maro
According to wikipedia they have ~2,000 employees, that's like ~$200M just for
payroll, overall costs are probably around ~$3-400M. (I didn't look up other
numbers, I just gut estimated.)

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humbleMouse
Interesting point Marco, and also begs the question of why the hell you need
2,000 employees to run a game company. Hopefully somebody gets put in charge
who will thin the herd.

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goldbrick
It's fascinating to see on HN (where people should know better) how many
companies people go "how can they possibly need that many people" and even
better "i know what will make them successful -- laying off a bunch of
people!"

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humbleMouse
So are you going to address the question of why Zynga needs to employ 2000
people to run a game company or not? I am actually asking and would be
grateful if you could enlighten me.

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hluska
I'm not answering your question, just adding another point of data. But, at
one point, they had more than 3400!!

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digitalneal
I think we all know there will be another gold rush for "social" game
companies once VR takes off. So, IMHO, Zynga just needs to slug it out till FB
gets VR pushed to the masses.

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soup10
"I think we all know" VR is a niche gimmick until proven otherwise. Outside
the bubble of enthusiasts nobody is convinced people will attach a black box
to their eyeballs to game.

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TillE
Yeah it's almost as dumb as dancing around, waving a plastic stick. Oh wait.

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potatolicious
I mean... it _is_ kind of dumb, which is why the Wii never had any longevity
and Nintendo has almost entirely abandoned motion gaming and is currently in
the shits business-wise. Not to mention while Nintendo sold a lot of Wiis for
a little while, attach rates were horrendous (i.e., people didn't find the
experience worthwhile enough to buy more games).

I think most people are in agreement that, simply from the fact that VR
doesn't currently exist on the market, and the novelty factor, we're going to
see a spike in VR sales and development.

The real question is whether or not this will last, and whether it has the
potential to become a substantial part of the mainstream in the medium-long
term.

My bet is on VR becoming more refined and better, with enough business to
support a few small-ish headset manufacturers, but it will not come anywhere
near, say, the scale of the Xbox/Playstation/PC install base. The big
challenge is getting devs to support it - VRizing properly is not a small
feat, and developers have proven very reluctant to support niche hardware
(see: Kinect).

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n0us
Wii was also a fraction of the price for a console that multiple people can
play including controllers compared to a single VR headset that doesn't
include the high end computer and technical know-how to set it all up.

I wouldn't underestimate the impact of "social" gaming on wii's success, it
was seen as accessible, casual, gaming at an affordable price. One of the
unfortunate aspects of current gen consoles is that the games don't support
single-console multiplayer for the most part. I have to leave an go home if I
want to play destiny with my friends.

With VR you can't really share the experience so it sort of loses the word of
mouth type virality that came along with Wii where you might go to someone's
house and play together. Instead it's a solo experience. Even if multiple
people have headsets (even more money) you still aren't sharing in the
experience in any way.

The smartphone headsets are somewhat better, but still just kind of a neat
trick. I don't deny that VR is plenty cool but the barriers for widespread
adoption are just too high in every direction I look.

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potatolicious
I'm a fan of couch-gaming too, but the market has pretty much spoken clearly
on that.

The Wii was in hindsight in the same space as Guitar Hero and Rock Band -
really cool social experiences that ultimately had no sticking power. Both
were a flash in the pan (to the tune of a couple years rather than a couple
months, but still very temporary), and both are deader than a brick right now
despite attempts to resurrect it.

But in any case, agree - VR is just too limited, too niche, and too expensive.
Costs will surely come down, but by enough to get a huge install base?

The Wii was dirt cheap compared to consoles of its generation, and even it
couldn't sustain sales despite having a novel but niche experience. At
$600-800 VR has absolutely no mainstream future, at $300? Maybe not even then.

The PSVR is IMO the most realistic shot right now at mainstream VR - it
promises to be cheaper than Oculus and Vive, and has a dependency on a medium-
priced console as opposed to a high-end gaming PC. Even then, the all-in cost
of PSVR is likely still going to nearing $1k.

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mathattack
Is there any evidence that they can get another major hit? More broadly - who
are the companies that have had multiple gaming hits, and what does (or
doesn't) Zynga have in common with them?

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davyc1234
They were able to have medium mobile successes with releases of Slots games
and Farmville 2 Country Escape. The mobile games business is getting more
mature and only a couple companies are really well positioned to execute and
have actually proven they can make followup multiple big hits: Machine Zone,
King, and Supercell. Zynga is not at their level and perhaps fighting to be in
the next tier of mobile gaming companies (5-20), which isn't necessarily a big
criticism that their not a top dog. But given their resources they should be
able to compete better. The problem is their upper level management and C
level execs, which have combined to produce a terrible company culture along
with making poor strategic decisions. Their game development is driven mainly
by MBA type Management consultants and East Coast ivy league graduates. Only
on the shiny surface are they are Silicon Valley tech company- more of a
stepping stone for opportunistic business types to get into tech. They have a
great analytics infrastructure, but then they are not smart with how they use
the data- and it's rather just used as a tool for Managers and execs to push
their own agendas and to claim credit for various projects. Their are whole
departments that are essentially useless and have no clue. Across the board-
terrible management. If they empowered the people on the ground their who know
what their doing, then they'd have a much better chance of success.

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mathattack
_If they empowered the people on the ground their who know what their doing,
then they 'd have a much better chance of success._

It's very hard for companies to regain this once it's been lost. This is why I
think it may be hard for them to regain their greatness.

