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Zynga - Analysis of Blue Ocean Moves
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Zynga - Analysis of Blue Ocean Moves

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  • 1. ZYNGA GAME NETWORK, INC. Hold’em Poker Mafia Wars Farm Ville Draw Bubble City Ville Something SafariAnalysis of Blue Ocean moves Group 7
  • 2. AGENDA Industry Competitive Blue OceanIntroduction Overview Landscape OfferingAttractingNon-Customers Sequence of BOS Sustainability Conclusion
  • 3. Introduction Entered the market with a novel concept of social gaming and was the fastest growing Game Company in 2011 Founded Market Mission Valuation Connect the world 2007 $ 7 billion through games Daily Active Customers Revenues Game Studio Users Acquisitions 60 million 230 million $ 1.2 billion 15 Mobile Surpassed market value of long time console game 17 Games company EA Sports Facebook Games 15
  • 4. domination of PC/Console based gaming competingIndustry primarily on Graphic sophistication & Complex Gameplay Young Sec–A and Professionals Sec–B $ 25 bn $ 5.6 bn Revenue Revenue 15% $ 6.6 bn Mobile Revenue 18% Sec–A and 67% Online Sec–B Console BasedParameters of Competition Graphics Accessories Complex Gameplay *Market Size (Revenue – 2007)
  • 5. Landscape All market players were trying to compete on similar parameters only through price differentiation High Low 1 1 2 2 3 3 4 4 5 5 Console Gaming Parameters Price of Hardware Cost to Cost to Violence Violence Play to Play to # of # of Legend Hardware Start Start Win Win Genres Genres Online Gaming 6 7 8 9 10 Mobile Gaming # Titles in # of New Cost of Graphics Creativity Genres Games Mktg.
  • 6. Blue Ocean Offering Changed the parameters of competition to ease of gaming and socially engaging, simplified gameplay Violence NEW PATHS Eliminate Cost of Game Gameplay Marketing Gaming Hardware 3 Different Reduce Complexity Cost Buyer Group Graphics Genres Functional/ Emotional Appeal Social Network Ease of Starting 5 Raise Activity Learning Quotient Social Create Gaming Ability to buy fast progress
  • 7. Blue Ocean Offering Changed the parameters of competition to ease of gaming socially engaging and simplified gameplay High Low 9 10 11 12 CREATE Social Learning Ability to Social Network Quotient buy fast Gaming Activity progress
  • 8. Customers The broad adoption of Zynga games can be attributed to Non- attractive value proposition for all 3 tiers of non-customers UNEXPLORED PARENTS & 36+ Tier – 3 • Removed Violence • Play with Friends & Family Tier – 2 REFUSING CASUAL PLAYERS • FREE Games • Ease of Starting Tier – 1 SOON-TO-BE TEENAGED • Complete NEW genre NON-FPS • Bragging Rights • Social Engagement
  • 9. Sequence Zynga® has changed the basis of competition by simplifying Purchase & Delivery and improving Convenience during Use Purchase Delivery Use Supplements Maintenance Disposal Buyer Productivity Customer Utility EA® Simplicity Price Zynga® Convenience Cost Risk Fun & Image EA® Environmental Friendliness
  • 10. Sequence Offers unmatched value for its customers at a price they are willing to pay. It is aligned with the target customers’ needs Buyer Utility Revenue Energy 3% Characteristic Price $ 1.2 bn Paying PAY for FASTER Customers REFILL Cost Free to play but require $4999 NO COST purchases to unlock Premium for additional features Game Pack hardware FREEMIUM
  • 11. Sequence Internet based business model and the absence of a distribution structure ensures lower costs relative to competition Buyer Cost of Sales / Revenue Utility Year Price 2010 Cost Zynga
  • 12. Sustainability Markets are questioning the sustainability of the model as imitators/competitors are swarming the once Blue-Ocean Imitation Non-Exclusive Innovation Channels All games have become “cow- clickers” Falling Share Price 83% fall on NASDAQ (Jan-Jun ’12)
  • 13. Conclusion The company had successfully overcome traditional gaming and established social gaming now needs to re-innovate to stay afloat Eminent Red New Growth Challenges Ocean Channels Plateau New Brand Innovation Image
  • 14. THANK YOU

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