Zynga Using Android to Extend Reach for Social Networking Games on Mobile Devices

Zynga will use Google Android-based games to extend the reach of its social networking titles on mobile devices, Chief Game Designer Brian Reynolds told us Tuesday at the International Toy Fair in New York. With the December buy of software developer Newtoy, Zynga is readying an Android version of the company’s popular Words With Friends crossword game that was released last year for iPad.

Words With Friends, which was renamed Zynga With Friends, was downloaded to more than 10 million devices as of October and will be released on the Android platform later this month. Zynga introduced its first Android title, Texas Hold'em Poker, in November and will bring its iPad and Facebook games Farmville and Mafia Wars to the platform, company executives have said. Among Zynga’s investors is Google. Zynga formed a division dedicated to developing Android-based games, Reynolds said. While Zynga “isn’t as far as along” in creating mobile titles as it is for other platforms, “we're coming around,” Reynolds said.

While social game development cycles for Android games are shorter than those for Facebook titles, there’s “friction” in getting access to a social media game on a cellphone, Reynolds said. While progress has been made, technical hurdles still must be cleared for social networking games to grab hold in mobile devices, Reynolds said. “A cellphone is wired to text to my friends, but the operating system doesn’t make it easy to get at that information so there is high friction to inviting them” to join a social networking game, including installing software: “Contrast that to Facebook, where you come to your news feed and you see that a friend is playing FrontierVille, you click and you are in."

The shorter development period for Android is driven by the open-source software and the ability to hire developers skilled in the platform, Reynolds said. “If you have a better partnership with the platform so there are not so many draconian rules and you are able to hire people with experience,” it shortens the development time, he said. While Zynga and Facebook, which accounts for most of the company’s business, clashed last year over the social networking site’s requirement for exclusive use of Facebook credits in applications, fences have been mended, analysts said. Facebook vendors agreed to share profits with the company, they said.

"Since that came in, everything has been great with Facebook and they are very happy to take our checks and for us to be on their platform,” Reynolds said. “They want to be a platform company and not a content company. If you are a platform company and you try to become a content company then you are competing with all your other providers."

At the time of their differences with Amazon, Zyngna was weighing developing its own ZLive network for social games, analysts said. While Zynga is “continuing to look at that stuff,” anything that is created will be “part and parcel” with Facebook, Reynolds said. “There isn’t any kind of giant sea change coming with the way we do business.” Zynga wants to raise $250 million to further grow its business, analysts said. Reynolds declined to comment. If Zynga succeeds in the funding round, its value could grow from around $4 billion last April to $7 billion-$8 billion, analysts have said. Its value is currently placed at $6.17 billion, ahead of Electronic Arts at $6.09 billion, private stock sales service SharePost said.

Zynga raised a combined $300 million from Softbank and Google last year, analysts said. The privately-held company posted $500 million in revenue in 2010, derived from direct credit card payments and partnerships, analysts estimated. Players can accept credit card offers, take surveys or buy services from Zynga partners to gain game credits. Zynga also sells pre-paid cards for virtual currency used in the games through Wal-Mart, Target and others.

"Right now we have so many more good game ideas than we have programmers to implement them,” Reynolds said. “Even with some of the games that seem like they will be guaranteed home runs, I have a hard time putting teams on them because we need to grow so fast just to keep up with current stuff.” The company, founded in 2007, has grown to a staff of 1,500 with 14 development studios, including most recently Zynga New York, which was created with the acquisition in January of Area/Code. It has about 365 million monthly active users and 60 million daily users, the company has said. CityVille, which launched last fall, has about 5 million daily users, analysts have said.

Toy Fair Notebook

Sears is weighing reconfiguring the toy departments it has opened in 79 stores in eight U.S. markets since 2009, before opening new locations, Julia Fitzgerald, chief marketing officer for Sears Holdings’ seasonal and toys business unit, told us. The 1,200-1,800-square-foot sections, carved out of part of the children’s clothing departments, grew from 20 stores in 2009 to 79 locations last year. But some features, including a kiosk for ordering products online, needed to be given more prominence, Fitzgerald said. The ideal size for the department is 1,700-1,800 square feet, to provide room for Hasbro, LeapFrog Enterprises, Mattel, ThinkFun, Vtech and other products, Fitzgerald said. “We have a lot of initiatives going on right now and we are still deciding where we put our capital,” Fiztgerald said. “We keep trying fine tune it. We're satisfied with that format, but it’s how we lay it out. At first when we put out the kiosks, customers weren’t really aware of them. Now we're going to decorate the kiosks a little more” to increase their visibility in the toy department. Sears will raise the profile of toys on its website this year because “we are going to reach more people at once by making it bigger on line and there will be a big focus on that,” she said. Sears is trying to stock its shelves with more specialty toys this year to separate the chain from Wal-Mart and Target, she said. “It’s a new venture in trying figure out which portion of specialty still sells and who that customer base is.”