Bigpoint boss says if you’re going to start up a social firm, make it in the US
This year’s London Games Conference opened with a startling signal of how fast social game firm Zynga is growing.
Heiko Hubertz, the CEO of international social firm Bigpoint, told a packed room of attendees that Zynga is a bigger company than the sum of five leading European equivalents.
Gameforge, Jagex, Playfish, Unity and Bigpoint are – combined – still not big enough to measure up to Zynga by its valuation, says Hubertz
Hubertz’s analysis came in an enlightening, information-packed speaker session where he demystified many assumptions and theories surrounding social and online game companies.
He said Zynga’s key advantage was its focus on America, which has some 260 million internet users. Though that’s half the 425 million net users across Europe, the USA is crucially a market with one predominant language, one currency, and low barriers to entry.
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“If you’re going to start a social game business, make it sure it’s in America,” he said.
Zynga was recently independently valued at $5 billion – making it, in theory, a more lucrative company than EA.
Hubertz’s own firm Bigpoint is still growing, he added. The firm is aggressively expanding with around fifty new hires each month, serving over 150 million users.
I think Zynga's valuation is a joke.
There's only so long people will continue to buy priced pigs and then they'll need new IP. However Zynga have shown they aren't necessarily good at creating that, just copying what's already there plus they're totally at Facebook's mercy and with them moving over to Facebook credits and banning the type of feed spamming Zynga took advantage off it will mean Zynga will make much less profit (30%) and have to pay for advertising.
All that plus increased competition means they will find it hard keeping their existing customers plus win more.
They took advantage of gap in the market and practically created a new market in the process but I think they've peaked.
Time to sell to a bigger player.
