ZYNGA: Online Games Get Real

ZYNGA: Online Games Get Real

Thesis Statement

Zynga games is one of leading and the most successful gaming companies of the world, and they have achieved this all through Facebook.

Purpose of paper

The paper is written to evaluate the strengths and weaknesses of Zynga Games. The dependence of the Zynga Games on Facebook is also discussed in the paper. The paper will also throw light on the effects of Zynga Games on the video games industry and the sophistication of the accessible games.

Overview of paper

The paper will start with an introduction of Zynga Games. Then the marketing relationship between a virtual and a durable product will be discussed. The next section of the paper will include the effects of the dependence of Zynga Games on Facebook. The next part will include the opinion about Zynga Games that will it have a negative effect on the existing video game business and the sophistication of the games available. The last part will include the conclusion of the paper. Recommendations to Zynga Games will also be included at the end of the paper. The last part is the references section. A brief summary of the Case Study is also available at the end of the paper.

Discussion

Marketing Relationship Between A Virtual And A Durable Product

A virtual product has different ways of marketing than the durable products. The relationship between these two is that both of them are marketed in an essentially similar way. The virtual products that are marketed by Zynga are also durable. They market the products in a way that the customers find them durable. The durable products in the online market are also marketed in the same way.

Dependency of Zynga on Facebook

The biggest risk that Zynga is facing is its entire dependency on Facebook. It is totally reliant n Facebook for its revenue. It also pays 30% of all its revenue generated to Facebook (www.rightscale.com). The revenues include the ad revenues that it generates from the ads posted on Facebook pages and news feeds. Zynga Games has also agreed to use Facebook credits as their sole means of payment. This is to continue for another five years. The customer base that the Zynga Games has is very narrow right now. Since it is solely dependent on Facebook, the revenue of the virtual goods come only from the 5% users of Facebook. If the terms and conditions that have been set between Facebook and Zynga Games become soar somehow, Zynga Games will suffer a lot. This is the reason that the company has started expanding. It has stated running its games on other networks like Google, iPhone yahoo and others, this is done to reduce the risks that Zynga has if it relies solely on Facebook for its revenue generation.

One never knows when a company would collapse. Zynga Games, therefore, cannot rely on a single social network for its revenue generation. It is very risky to depend on the success of Facebook and link it to the success of the ...