Ex-Zynga staffer torches firm's business strategy in Reddit talk
A day after Zynga (NASDAQ:ZNGA) announced plans to lay off 18 percent of its workforce, or 520 employees, one of those former staffers harshly criticized the social gaming firm's business strategy and culture in a Reddit "Ask Me Anything" question-and-answer session Tuesday.
Zynga suffers from "major issues" and an "inability to adjust to the changing market," said the employee, who spent almost two years on staff and chose to remain anonymous in order to protect himself from any potential repercussions. "[Zynga's] business strategy is terrible. They did great when Facebook (NASDAQ:FB) gaming was on the rise, but now it's declining and mobile is on the rise. They're trying to change over, but employ too many of the same game development 'best practices' that were developed for Facebook games. These just don't translate to the mobile market, which is why they're suffering in that market."
The ex-staffer also outlined a series of other internal issues, including "a lot of micro-management from the top down stifles the creativity and hinders the production of many games" and "an overreliance on every game being a blockbuster hit which makes the fun aspect of games suffer while making the money-grabbing tactics all too transparent to the users." Zynga also faces "a serious lack of foresight," he added: "Too many major decisions are quick reactions to sudden changes in the market. If some games (sic) jumps to the top of the Top Grossing charts then everyone need (sic) to drop everything and change to follow it. Which wastes time, makes for bad design and ultimately puts projects behind schedule. It just means they're always late to the party, and whatever game they're trying to compete with has already faded away by the time their own version hits the market."
TechCrunch reports that the Zynga cuts include virtually the entire staff of Draw Something maker OMGPOP, which it acquired last year for roughly $200 million. Zynga also will close its offices in New York City, Los Angeles and Dallas. In all, the cuts are expected to save the company about $70 million to $80 million. "These moves, while hard to face today, represent a proactive commitment to our mission of connecting the world through games. Mobile and touch screens are revolutionizing gaming. Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect. By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences," wrote CEO Mark Pincus in a letter to Zynga employees.
In the first quarter, Zynga's revenue dropped 18 percent year-over-year to $264 million. Its mobile engagement metrics also took a dive, with daily active users falling from 65 million to 52 million in the year-ago quarter.
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