Zynga’s Mark Pincus: Social gaming is not a fad

Social gaming took some hits during the venture capital panel at our GamesBeat 2009 conference in San Francisco — when asked about the future of social games, Jeremy Liew of Lightspeed Venture Partners said that’s not even a real category; at best, it’s a distribution model, and not a very effective one. Predictably, many at the speakers who took the stage later in the day for the social gaming panel disagreed. Mark Pincus of social gaming company Zynga (the furthest left in the photo) was the most forceful and eloquent.

“I believe that social gaming is something that will reach over to a mass audience that [most gaming] has not,” Pincus said. “I believe that social gaming is a new medium.”

When pressed on whether he was being too grandiose (after all, don’t most games have a social aspect?) Pincus elaborated on how playing a game on, say, Facebook differs from playing a game on Nintendo’s Wii: It’s all about social capital. On Facebook, when you play games you’re actually building up your social capital with your connections on the network. On the Wii, you’re just socializing with your friends: “It’s fundamentally different.”

During the venture panel Liew also made a comment specifically about Zynga to illustrate his point that viral marketing isn’t actually that effective — he said Zynga’s strong growth comes from traditional advertising, not social networking. But Pincus said that’s just not true.

“We’re signing up 700 to 800 thousand new users a day,” he said. “If we were doing that primarily through advertising, honestly, we probably wouldn’t be able to sit on a panel and say that we are profitable.”