The $1 billion IPO of Zynga – A branding nightmare
Tom Dougherty, CEO – Stealing Share
6 July 2011
Does anyone know Zynga or just FarmVille?
There are a number of IT/virtual companies that have gone public in recent days, including the recent $1 billion IPO filing from Zynga, the creator of FarmVille. Most of us have heard of the infamous FarmVille. I have friends and colleagues who bemoan their news feeds being hijacked by others who are all too willing to share their FarmVille prosperity with all of their friends.
“FarmVille, by all accounts, is simply a viral media success reminecent of Tony Basil’s “Mickey” of the 80’s. It is a one-hit wonder hoping to cash in on the investors inability to discern what is real and virtual.”
Zynga promises to “connect the world through games.” If you go to its website you will see that, in addition to being able to play one of their many retooled versions of FarmVille (such as Cityville and Fronteirville), you can also become part of its philanthropic organization of zynga.org. That’s where cartoon characters straight from the Zynga “villes” are unloading a truck to help victims of disasters. I guess now, in addition to wasting millions of hours online tending a virtual farm, I can also purchase some virtual goods to help out disaster victims.
On the surface this is great. Even though I don’t have the time or energy for FarmVille and the rest of the “villes,” they can aid in relief efforts without having to do a whole lot other than play the game and purchase some virtual goods with real money.
Let’s pretend for a moment that I can get over the fact that there are a great many people who are willing to pay real money for something that does not really exist. Or get over the apparent desire for a great many peopleto have a new hat for their computer generated avatar. Isn’t the money, after all, for a good cause?
But then why file for a $1 billion IPO?
Like all viral media, Zynga is no different. FarmVille, by all accounts, is simply a viral media success reminecent of Tony Basil’s “Mickey” of the 80’s. It is a one-hit wonder hoping to cash in on the investors inability to discern what is real and virtual. If you think about it, Zynga is taking the same approach with its potential investors as it has with its legions of Farmville players. It is attempting to create value in something that does not exist.
This is the problem with everything viral and social media-esque. None of it is real. In fact, it seems like it is all a house of cards waiting to fall down. Even Zynga’s main vehicle for its games, Facebook, is starting to see plateauing if not decreasing membership numbers, particularly in the developed world.
In the virtual world, reality is suspended to a large degree and people can make this virtual world what they choose it to be. Just ask Tom MacMaster, the American male behind the Gay Girl in Damascus blog.
Because of this, brand, which is very real, must be basis for choice. If you asked most who created Farmville, I bet the answer would either be Facebook or “I don’t know.” This means Zynga has not worked to develop its brand as a means to choose. Rather, its ability to get someone to play a new game rests in how viral that game becomes.
Brand as a means for choice gives a company, especially one whose product is not real in a tangible sense, a way to develop loyalty and preference without relying on something having to “catch on” first. Zynga, though hugely successful with its pretend farm game, has not invested in its Zynga brand, and therefore must hope that it strikes viral gaming gold again or it runs the risk of becoming irrelevant.
I am not sure if I would be willing to invest $1 billion in the hopes that viral gaming gold will be struck again, although I do wonder how many virtual goods I could get for $1 billion?
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