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Take-Two CEO: Zynga metrics "are sketchy"

Wed 30 Nov 2011 8:15am GMT / 3:15am EST / 12:15am PST
CasualPublishing

Strauss Zelnick attacks Zynga model, citing metrics and "disclosure issues"

Take-Two's CEO, Strauss Zelnick, has cast doubt on the Zynga business model, and accused the social gaming giant of having "disclosure issues."

"I would argue being the No. 1 player in (social gaming) is complicated, which is why Zynga hasn't gone public yet because their metrics are sketchy," said Zelnick at the Reuters Global Media Summit on yesterday.

"Zynga is a direct marketing company, 97 per cent of which don't pay them anything, 3 per cent who do," he said of Zynga users. "They churn quite quickly and they get new customers. That is their model."

Zynga has failed to respond to the comments. The company was in the spotlight earlier this week over claims that it had a "messy and ruthless" company culture.

"I think they have disclosure issues," added Zelnick, suggesting that investors needed to know if Zynga was losing users, and how quickly.

"I think you are seeing their acquisition costs go up, marketing costs go up and they have very high churn."

Zelnick also revealed that Take-Two is currently in the process of recruiting development staff globally.

4 Comments

Tim Carter
Designer - Writer - Producer

551 268 0.5
All game studios have high churn.

Why?

Game studios use a fundamentally broken production model.

They retain internal production staff.

This simply does not make sense. It would be like an architecture firm retaining internal construction staff. Between designs, the staff sits there and burns up overhead. So they spend lots of misplaced time, effort and money trying to put them to work.

Posted:2 years ago

#1

Alexander Bentchev
Senior Producer

3 2 0.7
Mhh, comparing creative entertainment industry with construction doesn't fit too well. Sure you can hire a couple random architects to draw up plans but that's totally different than a teamwork environment where you have to benefit from team experience.
That's one of the studios most valuable commodities...

Posted:2 years ago

#2

Daniel Cook
Game designer

2 0 0.0
The article is discussing customer churn, not employee churn.

Posted:2 years ago

#3

Andrew Coleman
Indie game developer

12 0 0.0
Comparing developers to construction workers is a bit of a stretch, I think. Excluding architects (who are typically a severe minority in any building project), construction workers aren't engaged in creative work, but rather productive work. Construction workers take the architect's blueprints and follow its directions specifically–they rarely, if ever, modify or contribute to the design of a building, but instead they actualize it.

Game developers don't work that way. QA excluded (for the most part), developing a game is a creative process for all people involved. Probably the best analogy can be made between a construction job and someone designing levels for a game: a level designer is more like an architect than a construction worker, as he or she is involved with the design of the level, rather than the actualization of the level, which is handled automatically by the software that the designer is using (that is, the level is actualized via the process of saving it as a file that can be used in a game).

Since creative work is something that is very individual-specific, i.e. the content and quality that one receives from different individual designers fluctuates and varies to a very large degree, that work cannot be commoditized in the same way that construction work can. (That is, any person with the physical capability can be expected to produce work of roughly the same quality and character as any other person in construction work; but this is not the case for creative work.) Because of this, it's safe to say that to keep production staff on only for the development of a title could be a case of throwing the baby out with the bath water. And to anyone who does it anyway: good luck when you need 1) fixes or changes after release that are dependent in information stored only in the heads of your now-former staff, or 2) a sequel that is at least as good as the original. (Regarding the second point–how many sequels to games, movies, etc. have you seen that weren't as good as the originals due to the fact that the creative person who made the originals great wasn't around? The Godfather: Part III comes to mind.)

Posted:2 years ago

#4

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