Mark Pincus: Managing Zynga Is Like Playing A Game

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By Steve PetersonPart two of our interview with the Chairman and CEO of Zynga, Mark Pincus, delved into the nature of social games, advertising, and the next great innovations. After interviewing many CEOs in the game industry, most are either a very business-focused person or a gamer at heart who also manages a business. Pincus is clearly a gamer at heart, even though he has his MBA from Harvard.

Disclosure: Pincus refers to Bing Gordon here, who is a partner at venture capital firm Kleiner Perkins and a Zynga board member. Bing is also the guy I used to work for at Electronic Arts back in the ’80s. I let Mark Pincus know that at the beginning of the interview.

Before proceeding, please first read Part One here.

Q: What games are you playing now?

Mark Pincus: I’m in a competition now with Reid Hoffman in Scramble With Friends. It’s not fun with Bing because he’s off the charts in that game. You have to be well-matched in a skill-based game. What we learned with collaborative games like FarmVille that are a little more like Settlers of Catan, which has been such a great social game, is they really hide the PvP, and they have such a brilliant balance of luck and complexity. There’s a complex social dynamic that keeps everyone in the game and you’re able to bring new people in because – I just brought a friend into the game, and he didn’t want to play, I think he ended up winning. It was basically because everyone would trade with him because nobody believed he had a chance of winning. It’s almost like this self-regulating game that creates its own balance of power, and everyone thought I’d be the best so no one would trade with me, and I came in last.

I think that there’s this balance that keeps the games fun and interesting. In skill and PvP you’ve gotta get the balance and the matching right. But we’re interested in how we’ve been able to turn on games that are hobbies for people, and they’re this escape but also have a little bit of click zen and a feeling of progressions without necessarily having to beat other people. People will still compete on levels, they make up their own ways, but they get to choose where and when they want it to be competitive versus collaborative.

Q: For different people there are different impulses; you or I may be more competitive, but your mum may just want to make something pretty. The best thing is when you have a game where you can choose you own victory conditions.

Mark Pincus: Yes! I’ve always said that a great social game is Shakespearean, because three different people can play and have totally different experiences, different paths, and get different things out of the same game. My nephews can play and it’s just a fighting game, my mum or niece can play and it’s a decorating game, and I can play and it’s a strategy game. I think there’s that potential – not always, because games can get diluted, but I think CityVille was a little bit like that.

My nephews were all about competing to have the most ubered up franchise, and they got mad at me when the franchise system didn’t go deep enough, because they’re real gamers. My mum just loved decorating and designing her city, and my nephews and my mum loved that they could actually share a game. What people forget – and I felt this growing up because I was a video gamer – you feel a little bit like this misunderstood minority. No one gets it and they think what you’re doing is dorky, and you’re like “No, no if you would just do this, it’s so cool, you’d get into this!”

Q: Then you say see, here’s this controller with 12 buttons, give it a try.

Mark Pincus: Right! With the Nintendo Wii, it was the first time I saw my family pick up video games and start playing; they were like “Wow, this is cool, I can do bowling and tennis!” and I’m like “I’ve been telling you this for years!” Even for someone who’s a fairly core gamer I think that there’s new fun when you can see that your real friends and family will participate in a game, and you’ll even step backwards, maybe, and play a game you wouldn’t have played, just because you finally got them in a game.

Q: You mentioned on stage about trying to build a network and trying to bring in games from other developers, and have Zynga.com as a platform. You also talked about transparency being important for you to confidently invest in a platform. Are you going to get to that point with Zynga.com, where you just lay the terms out there publicly like Apple does with the App Store, rather than negotiate one by one?

Mark Pincus: I think there’s a lot of things we need for this industry to grow. I think we need reliable, persistent navigation that is totally controlled by users, like we have on mobile. I think we need valuable communications channels. I think we need rules for developers that are transparent and don’t ever change, or if they do change it’s for reasons that developers agree with and understand to help grow the market of social gaming. Zynga is a participant in that ecosystem.

I believe that, not just in gaming, but in consumer internet and consumer mobile, any large consumer service application has an opportunity to open up APIs and enable other third-parties to innovate on top of their audience and their infrastructure, and that’s the path we’re moving down. In order to bring those developers, and have the really good ones invest in your platform over time, you need to earn and maintain their trust by being open and transparent and consistent and reliable and they need to feel like it’s a dial tone; it’s something like a utility that won’t ever change, or if it does it’s because you believe you just made it a better dial tone.

Q: Like Amazon Web Services.

Mark Pincus: Yeah, we can see examples like AWS that have just done it beautifully from a developer standpoint. They’ve become part of the tech stack of the Internet. They are providing a really incredible valuable service that’s giving leverage to thousands of developers, and we hope to provide a piece of that tech stack as well, and do it in a way that developers and companies feel like they can form 10-year relationships with us, that they can invest in this, see where it’s going, and see what we’re building together. We’ve always been a company that’s about partnering. As a developer, we’ve tried to be the best, most valuable partner to Facebook, to Apple, to Google, to the Android carriers, and we hope to be the most valuable, reliable partner for any other developers if they publish with us, if they use API’ed services from us.

Look, I’m in this for the rest of my career. The same way you have been, and Bing has been, except I’m in social gaming instead of traditional gaming, and it’s only been five years, but I want to build something, and I want to build these relationships with players, with developers, something that stands the test of time and is really important and valuable. I’m inspired by the way that Jeff Bezos has made that kind of reliable, consistent investment with Amazon, you feel it. There’s just something that’s so rock-solid about Amazon, from 360 degrees it’s rock-solid. It’s become a permanent part of the landscape. I would bet it’s going to be there in 10 years.

Q: It’s become someplace people turn to automatically; when you need web service support, you call AWS.

Mark Pincus: Whether it’s AWS, or it’s Amazon.com as our bookstore and our e-commerce place. You feel it’s as permanent as Wal-Mart; in some ways maybe more permanent. That’s what we want to be. That’s what I want for social gaming, and I want for Zynga. If you look at the whole evolution and history of our company it’s been about driving for long-term sustainability and scalability.

Q: Does that represent a big change for you? Now as a public company with investors asking for quarterly results, and you’ve been focused on a long-term vision. That’s a big change in the way you have to look at things. Were you happier being a private company and then, damnit, the SEC rules forced you to become a public company?

Mark Pincus: I never really questioned whether we would go public, I just questioned when. I think that if you want to be a large, important company with a lot of employee shareholders and a diverse investor base, it’s just inevitable you’re going to be public. You do all you can to keep pointing toward your North Star – for us it’s social – and you keep trying to point to the macro opportunities. You try to say to investors, “Decide if you believe in that long-term opportunity and then decide if you think that our strategy and our execution against that is good or bad.” I think that’s all we can hope for.

I think companies in new industries can be misunderstood for long periods of time. It’s OK to be a little misunderstood; but what’s not OK is to change your strategy or your execution because you’re worried about what your industry or investors are going to think of you in the short term. I’m always inspired by how smart investors really are. When I talk to investors, the questions I get are whether we’re investing enough in platform, whether we’re investing enough in mobile, in advertising, and in these growth areas, not “are we optimising the current opportunity fully.” I’m a believer that the market rewards smart long-term investors, and the smart ones find their ways to the best opportunities. We hope that we attract those smart investors that see what we see.

Q: So you’re trying to create a good long-term climate and not worry about the daily weather.

Mark Pincus: Yeah, and when we get a daily report card, at least on our daily active users, and it’s a public report card, it’s a new thing. It’s not just being public; we’ve had this long before we went public. It potentially can be a constant distraction but the flip side of it is when you launch great new games and great new mechanics, and you move those numbers in big step-function ways like we have, that’s also exciting.

Q: It’s keeping score, and you get a high score. Look! New high score!

Mark Pincus: That’s right, it turns your day job into a video game. It has immediate – not always gratification, but immediate results of your decisions, and you’re on a long-term arc. That’s probably why I’m so addicted and obsessed with Zynga, because it meets all my criteria for a great game.

You can read the full interview here.

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