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SAN FRANCISCO — As Facebook has been colonizing the planet, approaching a billion users for its social network, Zynga has been drafting in its wake. The social-gaming company, which launched July 1, 2007, with a poker game, accounts for nearly 15 percent of Facebook’s first-quarter revenue and has more than $1 billion in revenue annually on its own.
But lately, Zynga’s stock has taken a hit, with investors concerned about negative free cash flow and too much dependence on Facebook. The stock has been well below its December 2011 $10 IPO price, and AppData reports that Zynga’s monthly active user growth has slowed to a crawl.
Today at Zynga headquarters here, founder and CEO Mark Pincus attempted to change perceptions about Zynga’s business future, at the “Zynga Unleashed” event.
“We have a lot further to go in connecting people through games,” Pincus said. “We think that if we can deliver on the promise of real social value through play, we can make it a treasured activity that people could not imagine living without.”
Zynga already generates a lot of activity, with 292 million users, including 65 million daily players and 22 million mobile users. Pincus described what happens in a minute in Zynga’s play world: 64,000 words played; 43,000 pictures drawn; 38,000 hands of poker dealt; 250,000 gifts from friends opened; 140,000 game turns; and more than 5,000 chats. In addition, Zynga generates 1 million player activities per second and 2.8 billion social interactions per day, with 1.8 trillion minutes of play over the last three years. Draw Something, which Zynga acquired recently, is on the cusp of reaching its 10 billionth drawing.
Pincus said Zynga’s growth would come through new genres of play, more mobile focus, and more dimensions to game play, such as multiplayer games. The company launched Matching with Friends, a new color-matching puzzle game in the popular “with Friends” franchise, and a casino game, Zynga Elite Slots. The new casino game lets friends share in each other’s winnings and features a variety of characters and scenes. (Casino is a major category for the company. Zynga Poker has 35 million players a month and 55 billion hands, and 16 trillion chips per day change hands. Zynga Bingo sees 10 million rounds a day.) Ruby Blast, Zynga’s new Web arcade game, will be available later this year on smartphones and tablets.
Mark Skaggs, senior vice president of product development, launched a new “Ville” game, The Ville, which is similar to the popular EA Sims life-simulation franchise.
In addition, Zynga showed ChefVille, where players design restaurants, cook recipes, serve customers dishes, and provide entertainment. When you master recipes, you earn real recipes as a reward.
Pincus showed a previewed FarmVille 2, an update to the original game that helped Zynga gain its market position.
Zynga hopes to grow its collection of games, especially for mobile, with a new Zynga API, which will allow third parties to create games on its social platform. In addition, the company launched Zynga Partners for Mobile, a way to bring more developers into the Zynga ecosystem and social network, separate from Facebook. Atari joined Zynga Partners for Mobile and plans to introduce a game for the platform.
Zynga is also planning to launch Zynga with Friends, a unified network and enhanced social lobby, with social streams, group chat, multiplayer games, and social matching, said general manager Manual Bronstein.
So far, Wall Street hasn’t rewarded Zynga for the announcements today. Zynga lost 30 cents, or nearly 5 percent in Tuesday’s trading.
