Zynga CEO wants 7% of players paying

Zynga CEO wants 7% of players paying

By Rob Crossley

December 9th 2011 at 10:16AM

Company 'sidesteps' questions after accusations of 'sketchy numbers'

Facebook games giant Zynga wants to double the number of people who pay for virtual items across its games library, the firm’s CEO was quoted as stating.
 
But, in a meeting with dozens of potential investors, Mark Pincus appeared to sidestep questions on Zynga’s alleged issues with player retention, according to a Reuters report.

Zynga is the biggest social games firm in the west with about 225 million total monthly active users, of which about 3.5 per cent (7.7 million) are considered unique paying players.

"We could see that doubling," Pincus said, ahead of the company’s long-awaited IPO.

Generally, paying-user targets on free-to-play games is around the 2-3 per cent range.

Noel Llopis, founder of the iPhone games studio Snappy Touch, recently claimed that “80-90 per cent of profits from freemium games comes from 0.5 per cent of users”.

Zynga has set its shares at $8.50 to $10, a move which values the company at about $7 billion – less than half the $20 billion estimates that circulated over the summer.

However it is not unusual for a company to set its share price low to drum up interest, in turn building momentum on its value.

Broader market turmoil, which had ripped through the US over the summer, had caused Zynga to delay its IPO. In the intervening months the extent of the four-year-old company’s profitability and company ethics has come under intense scrutiny.

Zynga’s $10 share price would raise the company about $1 billion, according to a regulatory filing.

Recently, Take-Two CEO Strauss Zelnick blasted Zynga’s numbers as ‘sketchy’, claiming that the company quickly churns through players.

When asked about Zelnick's remarks, Zynga COO John Schappert said his company can quickly launch new games, attracting more players.