TECH
06/03/2013 08:00 pm ET

How Zynga Became Master -- And Victim -- Of The Disposable Game

In the end, Zynga may be undone by same thing that made its online games so wildly popular: People seek out the new thing, find it, and then quickly move on to the newer thing. Especially in online gaming.

"One of the riskiest aspects of doing a mobile gaming -- or any gaming -- business is holding the consumer's attention," explained Nikoleta Panteva, an analyst with IBISWorld, a market research firm. "That can sometimes be very unpredictable, given that you can't tell what's going to cause consumers to lose interest in something."

As Zynga announced plans to lay off nearly one-fifth of its workforce on Monday, analysts saw in its troubles the same sort of problem that afflicts pop stars like Rihanna or Justin Bieber: The gaming industry is driven by hits, putting constant pressure on companies to conceive of and quickly develop one runaway success after another.

Companies like Zynga that target casual gamers, who can try new apps for free and without investing in any kind of hardware, must work especially hard to keep these more fickle users' attention. Zynga's massive audience of casual gamers is easily distracted by the company's proliferating competitors, and they have little reason to be loyal to Zynga. These users frequently view its wares as an enjoyable, but disposable, form of entertainment.

"To a large degree, the gaming industry is hit-driven,” said Brian Blau, an analyst with the Gartner Group. “It's not like productivity software that you'll buy and use over a long period of time. You're going to play that game, love it for hours and hours, then you move on to the next one. Game companies have to keep making games to keep you coming back to their brand."

In a move that seems to underscore the difficulty it's had retaining casual gamers' attention, Zynga recently announced that it will attempt to attract a more dedicated group of "midcore" gamers with games that "blend the depth of hardcore games, traditionally played on a PC or console, with the approachability and accessibility of casual games that are mobile, free-to-play and social," according to a Reuters interview with a Zynga executive.

Zynga has gone on an aggressive acquisition spree and embraced a data-driven game development strategy. But like a washed up pop star, the gaming firm has had trouble churning out blockbuster hits the way it used to, even as its competitors have moved quickly to develop their own suite of games aimed at the same audience. In the past year, Zynga's monthly active users dropped by 13 percent.

In part, Zynga's rivals have successfully copied the company's social approach, eroding its lead as one of the first to understand how to meld social media with games.

But Billy Pidgeon, an independent analyst who previously covered the games industry for market research firm M2 Research, blames the recent dearth of hits on Zynga's emphasis on quantity over quality in game development.

Indeed, past Zynga blockbusters have included games that take inspiration from classic board games or game shows, only updated with a social component: Words with Friends borrowed a great deal from Scrabble; Scramble, another word puzzle, bore more than a passing resemblance to Boggle; and What's That Phrase would look familiar to anyone who's ever watched "Wheel of Fortune."

Zynga chief executive Mark Pincus has said that his company takes pride not just in its invention of new games, but in its ability to reinvent old ones.

"We don't define innovation by whether or not our Words With Friends game looks different enough from Scrabble," Pincus said at a conference last fall, according to Business Insider. "For us, innovation is about making games more accessible, more social, more fun, and more free -- giving you more value for your time and money."

Pidgeon argues that this approach to game development has led to applications that appeal to the "lowest common denominator" of gamer. "It's more of a cynical take on gaming: 'What's the minimum we can do and have it work,' which is a bad philosophy for games," he said.

Faithful gamers have similar complaints. In a post published last December, John Sweeney, an avid Zynga player who runs an independent site called the Facebook & Zynga Blog, attributed Zynga's dwindling popularity to its failure to take time to address users' concerns. He also complained that its games were becoming less fun and more work.

"Zynga likes to blame the market for most its problems but in reality it is due to the company not caring about its player base, refusal to repair game issues, listen to the player base and game content overload that forces the players to be more like beggars," wrote Sweeney, who has served as a member of Zynga's Mafia Wars Players Advisory Committee. "They have taken the fun out of playing games and made it so if you want to be competitive and have fun you cant because now the games are more like a job and require too much time to get things done and the player base just refuses to be play the games anymore."

Ultimately, the initial lure of Zynga's games -- their social nature -- amplifies the impact of a user exodus, demonstrating that network effects can work in reverse: Words with Strangers wouldn't have been nearly as appealing as Words with Friends.

"You need other players to play," said Panteva, the IBISWorld analyst. "So if your friends stop playing, you stop playing as well."

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