David Ko sees mobile as critical for Zynga’s comeback in 2013 (interview)

GamesBeat: You guys did shut down some games recently. EA used to do something like 60 SKUs a year, and now they’re down into the 20s or something like that. Are we seeing a similar effect, a concentration on certain franchises?

Ko: It’s hard to comment on their strategy. They have hundreds of SKUs. The games that we develop are built around trying to create franchises. What I talked about in our last earnings call is having a new set of disciplines around the company. The company grew really fast in the last five years. We’ve talked about becoming more disciplined in our approach for new IP going forward. The space is getting very crowded. Production values are getting very high in games. You can’t just put a game out there and expect to be number one.

We’ve pushed teams to say, “What’s that next level of innovation and social fun that we want to see in our games?” Then, we’ll back it through our network. There are some games that we launch, and if they don’t have that franchise potential, what we want to do as a company is make some of those hard decisions. Sometimes that means closing them down faster.

GamesBeat: It’s interesting how a company like Kabam, on one hand, has smaller games that draw really hardcore audiences. It gets a lot of revenue out of those people. Then, you see things like Angry Birds. It’s interesting to decide which direction to go.

Ko: We have a very casual base, but we launched a game last year that basically created an entirely new division within the company around the mid-core space. The reason why you’re going to see games come out in this category is, we started a game out in Asia. It’s a card-battling game called Ayakashi. It is the highest-monetizing game in the company per [daily active users] that we’ve launched. It doesn’t have the scale of other games in terms of reach, but the people who are on that game monetize very heavily. We started to look at those types of games and put them in front of our audiences. There was a certain percentage of our base that said, “We really like that type of game.” We decided to get more aggressive, and you’re going to see more games come out in that space later this year.

GamesBeat: We’ve seen all these big changes happen in the traditional part of the game industry. THQ went bankrupt. Atari went bankrupt. EA fired John Riccitiello this week. How do you interpret some of these events? What does it all mean?

Ko: It’s hard for me to comment specifically on EA. What I would tell you is that, just in the ecosystem, there’s been a lot of shifts. We’ve seen shifts from traditional console gaming to where it went to on the web and where it’s going right now on mobile. That will continue to evolve. We look to create great, fun social content. This is what I tell a lot of our creatives. Our goal is to create this content and deliver it as widely as possible. Then, we want to deliver it where our players are at.

Our players are shifting quickly right now. We’re seeing that in our engagement. We’re seeing that in where they’re starting games. They’re telling us where they want to play games going forward. But as we start to create these new games, we also recognize that it creates shifts in terms of how you think about developing the game.

When I first came into the company two years ago and we said, “Let’s create a game on mobile,” our creatives would always start from the largest canvas possible, which was the PC. When they started to create mobile content, they would shrink that content down, and they would take away functionality and features. They were essentially making the game not as fun. We tried to change that mindset. We started to say, “Create the game from the smallest piece of paper possible and then create out. Make sure that the fun is in a smaller screen. Don’t take away functionality. Add to it. As you start to go to a tablet, whether it’s six, eight, nine inches, build outwards.” What we’ve found is our experiences have gotten a lot better, a lot more fun. We’ve seen our players react to that.

GamesBeat: The Game Developers Conference is next week. You guys got a little news out today ahead of that, with being able to log in using a non-Facebook login on Zynga.com. What’s that about?

Ko: We made an announcement today, which was just a continuation of what we talked about in our last earnings call. It centered around two things. One was an update to our agreement with Facebook, which just allows you to not only log in from Facebook but also log in from a Zynga.com ID. That’s just around flexibility. The second thing was around what’s best for our players. What we found was that there’s a large percentage of our players that like to play games on Facebook, connecting with their Facebook ID, which is great. But, there’s also a large percentage of our players who were coming to us and saying, “We want to play games in a gamer-specific environment.” We’ve tried to offer them that type of experience on Zynga.com.

GamesBeat: In closing, what’s the big story of GDC, and how would Zynga define success in 2013?

Ko: What you’re going to find next week is not just going to be around mobile. It’s going to be a lot of discussion around companies going tablet and tablet first. We’ve seen some companies recently saying, “I’m not building for mobile first. I’m building richer experiences for tablet.” Some of the form factors and the technology there let you have parity with a PC type of experience.

Success for Zynga is around three things this year. We’re focusing on creating franchises, which we’ve talked about in terms of some of our games. It’s going to be about creating and supporting our network. Finally, it’s a drive and focus on profitability.