CEO Frank Gibeau on how Zynga is regaining its mojo through live operations

It's time to create forever franchises

CEO Frank Gibeau on how Zynga is regaining its mojo through live operations

As Zynga CEO, Frank Gibeau doesn't suffer from a lack of advice about what he should be doing with the signature social games company that's loss-making but has $850 million of cash in the bank.

Gibeau's take on his job is, unsurprisingly, less hysterical.

It's a situation mirrored in the company's FY16 Q4 financials. Some will highlight the annual loss of $108 million and a year-on-year sales decline of 3%.

Gibeau, on the other hand, is enthused by the performance of Zynga's legacy games such as Zynga Poker and Words With Friends, both of which have had record years in terms of mobile operations.

Talking to about how the company spent 2016 focusing on "forever franchises" driven by the "bold beats" - events scheduled and run by the games' live operations teams - Gibeau enthuses that Zynga is "getting its mojo back".

"Our performance is payback from the investment we've been making in live operations," he argues.

"We needed to invest in live ops. Every dollar spend in live ops, whether that's R&D or marketing, provides us with our best return on investment."

More hard work

During 2016, Zynga launched 10 new games, including the first two new releases from its $527 million acquisition of UK developer NaturalMotion in 2014.

CSR Racing 2 had an awesome start. 2017 will be big for CSR 2.
Frank Gibeau

"CSR Racing 2 had an awesome start. 2017 will be big for CSR 2," Gibeau predicts.

He also admits Dawn of Titans (finally released in December 2016), was held in soft launch "for too long", and while its initial launch performance hasn’t been as positive as CSR 2, he’s confident about its future.

It's back to bold beats and live ops.

"There's more work to be done," he continues. "We're listening to player feedback and adding new systems to Dawn of Titans, new ways to compete, extending the elder game.

"As I learned at EA, you need to innovate to maintain long-term franchises."

Love what you’ve got

With the mobile games market now mature in the West, the challenge for companies switches from launching lots of new games, which is both expensive and risky, to becoming more efficient with products that have already gained some level of success.

And this is where Gibeau expects his live ops mantra will win big.

During 2016, key titles for the company such as Zynga Poker (almost 10 years old) and Words With Friends (eight years old) have hit mobile peaks.

Zynga's revenue is declining but mobile revenue is increasing

Ensuring games such as CSR Racing 2, Dawn of Titans and FarmVille 2 gain from this expertise will make Zynga’s financials more solid, Gibeau explains, also providing additional opportunities for surprise upsides.

“We’ll be releasing a handful of new titles in 2017, but because we don’t have to count on new revenues, I can be selective,” Gibeau states.

A sequel to Words With Friends is already in testing, while the franchise will be extended with Boogle With Friends and Crosswords With Friends.

Steady as she goes

Similarly, he’s positive if circumspect about dipping into Zynga’s huge cash pile for acquisitions.

“I like buying tuck-ins, smart, strategic M&A,” he ponders, pointing to Zynga’s recent acquisition of Puzzlesocial and the establishing of a new Helsinki studio that will be working on games in Zynga’s self-described ‘invest express’ category.

I like buying tuck-ins, smart, strategic M&A.
Frank Gibeau

With social casino and casual performing well, action strategy set to improve the recent NaturalMotion releases, it’s this one of Zynga’s four genre categories that provides Gibeau with his biggest headache..

The ongoing live ops focus will, no doubt, boost FarmVille 2, but thematically, if not financially, invest express remains Zynga’s weakest point.

“Yes, we have a lot of work to do in invest express,” Gibeau admits. “But overall there’s so much opportunity.”

The takeaway seems to be, don’t expect fireworks from Zynga in 2017.

Stamping down on costs, slowly and steadily improving on what’s already working and being open to the upside possibilities of acquisitions and new launches is the course Gibeau has set.

Steady as she goes, and thank goodness for $850 million in the bank.

Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.