Zynga - Analysis of Blue Ocean Moves


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Zynga - Analysis of Blue Ocean Moves

  1. 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. 2. AGENDA Industry Competitive Blue OceanIntroduction Overview Landscape OfferingAttractingNon-Customers Sequence of BOS Sustainability Conclusion
  3. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 14. THANK YOU