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Reports Raise Concern Over Zynga's Future
Reports Raise Concern Over Zynga's Future
November 28, 2011 | By Kyle Orland

November 28, 2011 | By Kyle Orland
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    9 comments
More: Social/Online, Business/Marketing



A pair of recent media reports are raising concerns about Zynga's ability to handle disgruntled employees and maintain player growth as the company approaches a highly anticipated stock IPO.

A Sunday New York Times piece cites a number of anonymous sources in and around the company to paint a picture of employees that are treated more commodities -- with a heavy focus on return on investment -- rather than creative professionals.

Complaints include long hours, aggressive deadlines and demotions for failure to meet constantly measured performance metrics. Anecdotal reports suggest recruiters are looking to poach many dissatisfied Zynga employees once their stock options become liquid.

The company's internal culture has also led to problems with potential acquisitions, according to the report, with casual leader Popcap refusing a buyout offer in part due to the company's "fierce internal competition."

The report also suggests Angry Birds maker Rovio walked away from acquisition talks with Zynga this summer despite a $2.25 billion offer from the social gaming giant.

Meanwhile, a BusinessWeek report notes that Zynga's heavily promoted launch of its first direct sequel, Mafia Wars 2, has fallen relatively flat with players, dropping from a high of 2.5 million monthly users after its October launch to a current mark of 900,000.

In-game item sales for the new titles are coming in well below expectations, according to anonymous sources at Zynga, and analysts note that the increasing cost of marketing a game and acquiring new players has put a strain on Zynga's profits, despite increasing revenue.

Zynga declined to comment on both reports, citing SEC requirements surrounding the "quiet period" before an IPO.


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Comments


E McNeill
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"A Sunday New York Times piece cites a number of anonymous sources in and around the company to paint a picture of employees that are treated more commodities -- with a heavy focus on return on investment -- rather than creative professionals."



That's funny. I get the same feeling about their players.

Shawn W
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The same old story of a company that works harder to satisfy investors than employees. Doomed for failure.

Harry Fields
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Or customers. The day Zynga folds, the world will be a little bit brighter.

Ken Love
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Look's like they're finally getting their come-uppance. Couldn't of happened to a nicer company.

Martin Sabom
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Fail. Short the (*&^ out of this stock.

Amandah Rockefeller
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I actually interviewed at Zynga for one of their QA positions which I never got, but I do have a friend that works there. It is very true about the culture. It really is not a great environment for creatives imo, and is run unlike any other game company I have ever seen.



There's nothing "fun" or "inspirational" about it, it's more rigid and commercial feeling. It feels more like the entire company is finance or Sales, and not a studio that develops games, of course the staffing also reflects this, it's very producer, finance/recruitment/general accounting etc heavy and development teams are actually stretched.

I noticed everyone is very competitive, very "blunt" with each other, almost every discussion is about money, stock or numbers and the staff seems to generally be very overworked and it really feels like some weird trafficking operation with people whispering about different teams, and people's performances etc.



The turn over rate is pretty high (or was within the first couple of years of operation) I applied back in 2009. I actually worked at one of the companies that Zynga sued back when they were growing over copyright infringement, they are very aggressive about litigation, and the aggressiveness definitely does not stop there.



Now I'm not saying Zynga isn't a good company, the culture may not be for everyone, but it is definitely not the kind of culture I would recommend for say creatives so I'm not surprised by the article, in fact if you spend too much time thinking about how much 'emotion' you want to get out of your characters or product etc you may literally be yelled at depending on who's leading your team.

The worst thing is people seem be walking on hot coals a lot there, so there is a bit of intimidation and second guessing in the atmosphere, so I believe there may be quite a bit of micromanaging, otherwise they introduce different ways of measuring employees performance and change it quite frequently, with people having different 'quotas' to meet so persons have have to constantly be aggressive and pushing themselves, so people may not agree with the execution or how this is encouraged (and hey they will get better as they grow) but that is not always a bad thing is it? For someone like me involved in QA I'm very used to the long hours anyway.

Adam Moore
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Zynga isn't a game company - they're a marketing firm that happens to make games. They changed their name from Presidio Media to Zynga to rebrand themselves, but they can't change the way they view the world by changing their name. They view the world in terms of DAU and ROI - all that matters to marketing are the numbers.



What they appear to fail to comprehend is that their creative employees, NOT their brands or franchises, are their most valuable resource. And if they do understand this they aren't very good at acting upon this information.

Jeffrey Crenshaw
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Team Bondi, the Steven J. Baum law firm (the foreclosure mill that had to shut down amidst bad publicity over Halloween parties where staff dressed up to mock the homeless that they put out on the streets) and now shaky grounds for Zynga... I'm starting to feel relieved. For a while, I thought sleaze was simply going to become the new norm. Hopefully we are entering an era where corporations and smaller companies will be held more accountable for how they treat their employees and customers. Hopefully cases like these will cause those in power to think twice about abusing it.

Russ Menapace
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All the pieces are in place for people to form their own companies. At some point the perceived risk in going it alone should be outweighed by the distaste for being exploited by a sleazy megacorp.



We don't have to put up with this kind of stuff.


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