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Zynga's controversial CEO is a veteran of the first dot-com boom, having founded and sold his first company, Freeloader, for $38 million in 1995. (Other companies he created include SupportSoft and Tribe.net.) Pincus is alternately despised and admired by industry observers and his colleagues, but most people agree he is inseparable from the aggressive corporate culture that has driven Zynga — named after Pincus' late bulldog — to the top.
Critical tech bloggers had a field day with a talk Pincus gave to aspiring entrepreneurs at a UC Berkeley event last March, during which he claimed he "did every horrible thing in the book just to get revenues right away" when Zynga was founded. Yet in May, he was the subject of an admiring profile in Details magazine, which portrayed him as a plainspoken capitalist beset with sour-grapes complaints.
Pierre Wolff, who was Pincus' vice president of business development at Tribe.net, says, "Sometimes people don't understand the responsibilities that CEOs have, so sometimes they'll take that as, 'Why is he being such an asshole?'" Wolff did allow that Pincus sometimes uses language devoid of "soothing qualities," and could be challenging to work for, depending on how you adapted to his management style. "He's moving at 100 miles per hour. You've either got to get on the bus, or you're not on the bus," he says. "Most people have a buffer. ... Mark's not like that. He thinks it, and he says it."
Pincus' leadership was a subject of some concern among Zynga's early investors, according to a confidential memo obtained by SF Weekly. The document, produced by renowned Silicon Valley venture capitalist Bing Gordon for the investment group Kleiner Perkins Caufield & Byers, recommended that the firm invest heavily in Zynga.
It also warned, "Mark needs strong lieutenants to keep him from micromanaging."
The memo suggested that Gordon himself and at least one other top-level executive play strong roles in the company to offset Pincus: "Bing to temper Mark, and bring onboard a billion-dollar game industry COO when Zynga gets to about $100M."
While Zynga has long since surpassed $100 million in revenue, it's worth noting that the company has added a few heavy hitters to its management team this year, including former Electronic Arts executive Steve Chiang, now Zynga's president of studios, and Dave Wehner, the former Allen & Company director who in July was hired as Zynga's chief financial officer.
Wehner's arrival, in particular, was interpreted as a sign that Zynga is preparing for an initial public offering in the near future.
But as the company gears up for an anticipated IPO, some question whether its best days have already come and gone — whether the business model pioneered by Pincus can sustain itself over time.
At present, Zynga's fate is largely tied to that of Facebook. (This was a concern cited in the Kleiner Perkins memo, which noted that Zynga's revenues are "overly concentrated on Facebook.") But the social-networking site has recently taken steps to tamp down the marketing ploys that helped drive Zynga's rise. Players are now restricted in how much they can spam those in their social networks with advertising messages, for example.
Perhaps more significantly, Zynga's massive audience is showing signs of fatigue with the inane forms of entertainment that have earned the company so much money. FarmVille's 62 million monthly users represent a significant drop from the application's peak of popularity. FishVille now has about 9 million monthly users, down from a high of 26 million.
A consensus has formed among industry observers that Zynga needs to be on the lookout for its next blockbuster. "Zynga is now a studio, and it should be looked at in terms of its financial future as a studio," Martino says. "And if a studio can't produce hits, it will eventually suffer impairment to its financial situation."
One of those preparing for a future in which Zynga's brand of simplistic entertainment no longer holds sway is Alex St. John, president and chief technology officer at Hi5 Games, a website trying to establish itself as a hosting platform for more sophisticated social games. He predicts that "a second generation of games" will overtake the wildly popular suite of mafia-style and "Ville" applications that have so far dominated the web. "FarmVille's audience has collapsed," he says. "There's a perception that Zynga has a very large audience. Zynga itself is completely dependent on Facebook — for its audience, for its monetization. Nobody wants to play the games outside."
According to St. John, the new generation of social games will have more depth. Such apps could prove better able to hold users' attention over time, and their complexity would serve as a safeguard against the kind of profitable copycat-ism perfected by Zynga. "The only way to make games that are highly defensible" from copyright infringement and user boredom, he says, "is to make the gameplay richer and more sophisticated, or the business model richer and more sophisticated."
It may be that Zynga is starting to figure this out. The company's latest release, FrontierVille, is basically FarmVille moved to a Davy Crockett-style American outback. But it does feature a wider range of gameplay options — from simple missions, such as bringing a wife out West, to activities like clobbering snakes and scaring off bears — that distinguish it from the mind-numbing repetition that characterizes FarmVille.
"With FrontierVille, they're bringing something new," says Joel Auge, owner of Canadian game developer HitGrab Labs. "I think it's their first foray into creating something original on the platform."
One former Zynga game designer, speaking on condition of anonymity, says he has kept in touch with former colleagues who say the company has hired high-caliber designers and adopted a new emphasis on original content and more sophisticated applications to draw in, and keep, users.
"They've brought in people who know games, which is why FrontierVille is a much better game than what they've generally put out in the past," he says. "They've moved somewhat away from the startup model and seem to have much better structure, from what I've heard from people still there. Of course, the real question is whether they can actually get the company value up to the point it needs post-IPO. Pincus will undoubtedly make his money and take off, as he has before, and the company's bubble will burst." Zynga's roughly $600 million in venture-capital funding, he adds, is "a lot of investment to show value for."