Zynga filed for its IPO last week, and with that the company appears to be ramping up its presence in mobile. The S-1 illustrates how important that industry is to the social gaming company: “We believe there is a large opportunity to extend our brand and games to mobile platforms such as Apple iOS and Google Android,” Zynga says in the document. “We will continue to make our games accessible on a large number of mobile and other Internet-connected devices and invest in developing and acquiring development talent, technologies and content.” Which could mean that mobile gaming is about to get much more social.
And it appears Zynga is finally gaining a little traction among mobile users, too. The company claims its daily mobile audience grew “more than ten-fold” from last November through June 2011 (it didn’t disclose any other figures regarding mobile activity), and it recently claimed three of the 15 top-grossing titles on iOS. But while Zynga helped pioneer online social gaming, mobile gaming is an established segment teeming with powerful competitors like Electronic Arts, Gameloft and Rovio. To take on those players, and to thrive in mobile and build on its new-found momentum, Zynga has its work cut out.
Here are a few key strategies the company should pursue in order to compete:
- Forge new alliances: Zynga concedes in the S-1 that it generates “substantially all of [its] revenue and players through the Facebook platform,” leaving its business almost completely dependent on the massive social network. Zynga can reduce that dependency by partnering with carriers and handset manufacturers to develop content and distribute its titles. It could score deals to have games preloaded on handsets and tablets, for instance, or to have carriers help market its titles. The company began pursuing that strategy this week with the news that it will team with AT&T to provide customized games to subscribers through Android Market.
- Continue to acquire: Mobile gaming is very different than online gaming: Screens are smaller, average gaming sessions are shorter and navigation is often more difficult because phones don’t have a joystick or mouse. Zynga must buy the expertise it lacks in mobile. The company picked up a sizable chunk of the mobile gaming market with last year’s acquisition of Newtoy, which developed the popular Words with Friends franchise. It must continue to identify and acquire studios that understand what users want in a mobile social game. There’s no shortage of potential acquisition targets, but acquiring a company like Glu Mobile, Digital Chocolate or Pocket Gems could help ease Zynga’s transition into mobile.
- Focus on tablets as well as smartphones: Tablets are still low-hanging fruit for game developers: Their processing power and big screens provide a much richer gaming experience than handsets can support, and far fewer apps are available for them, making it easier for developers to bring attention to their wares. The New York Times’ David Pogue, for instance, recently determined that only 232 apps are available for Android tablet users — a tiny sliver compared to the hundreds of thousands of apps available for handsets through Android Market. If Zynga can churn out compelling tablet-optimized versions of some of its successful online games, it could help the company close the gap with established mobile game developers.
Zynga faces other challenges in mobile: It will have to embrace multiple platforms and payment systems, it must address a wide variety of devices and it will have to better integrate its traditional online games with its mobile offerings. But there’s no question that a powerful new player with legions of fans has joined a mobile gaming space where the landscape can change quickly. If it executes, Zynga could become a dominant player in the very near future.