What will our players thank us for?
A founder has many roles in building and scaling a successful company — raising capital, developing an organization, recruiting a strong board, and constantly working on a winning culture. But ensuring you offer a product customers love is always job one. In my own experience with Zynga, we had many successful milestones as we built the leading social gaming company on the Web, serving 300 million players. However, the transition to mobile challenged our ability to continue delivering games our players would thank us for and left the company headed in the wrong direction.
That’s why in 2015 I put my own product incubation efforts on hold to return to Zynga as CEO to help restore our focus on our players and franchises. We had to make hard cuts, shuttering games and studios, and we saw our stock price hit new lows. At the same time, we invested in the quality of our core games and eventually saw our player engagement, bookings, and EBITDA return to growth.
Soon after I returned, Bing Gordon re-introduced me to Frank Gibeau who had recently left EA and subsequently agreed to join our board. I found in Frank a kindred spirit who brought a deep passion for games, an amazing attention to small detail, and an impressive ability to think and act at scale. Even more importantly, Frank and I shared a vision for social gaming and a commitment to franchises. In 2016 we recruited Frank to become CEO.
Frank has run Zynga now for over two years. During this time, he has assembled a great management team who, together with Zynga’s game developers, delivered bold beat features that have excited and ignited our players across our franchises, in particular Words with Friends, Zynga Poker, and CSR2. This strategy, along with the dedication of our Zynga employees, has generated strong results over the past three years:
- Zynga Poker app rating (per SensorTower) from 3.0 to 4.4 stars
- Mobile DAUs from 19 million in Q1 2015 to 23 million in Q1 2018
- Mobile bookings from $476 million in 2015 to $741 million in 2017
- Cash flow from operations of $-44 million in 2015 to $95 million in 2017
- Returned $400 million to shareholders via stock repurchases
The right time to make a change
With Zynga in a strong position and a team focused on our players, it’s a good time to evolve my role again. As of today, I’m transitioning to non-executive chairman and converting my super voting shares into Class A common, which will eliminate our multi-class share structure and move us to one share, one vote. I will continue to be passionately engaged in Zynga and will continue to partner with Frank on strategy, especially on new platform efforts like Facebook Messenger Instant Games.
The innovation opportunity for Zynga today is magnitudes larger and even more relevant than it was 11 years ago when we started. Mobile gaming, which didn’t exist in 2007, is now a $70b (and growing) business. Yet mobile games are arguably less social today than Web games were in 2010 when FarmVille was at its peak. Even though we’re more connected than ever, it’s harder to find and play with our friends than it was eight years ago.
In terms of what I will do next, Zynga started with one product idea and one test. We wondered what would happen if we let real people play and meet in poker on Facebook. I love bringing new ideas to consumers, testing, learning and iterating. And I love investing in entrepreneurs and teams doing the same where I can help. Expect to see a lot more of both from me.