Zynga founder and CEO Mark Pincus spoke at the Fortune Brainstorm Tech conference this morning, where he addressed some of the negative talk about the social gaming giant.
First of all, Pincus said he didn’t regret the timing of Zynga’s IPO, even though the company’s stock is now trading at well below its IPO price. However, Pincus said it’s hard to think of a big consumer brand that was able to stay private, so he knew he’d have to go public at some point. In fact, he said that with so many employees and stakeholders, Zynga started trying to act like a public company well before the actual IPO.
“We didn’t spend a lot of time trying to figure out the timing,” Pincus said — instead, the timing was decided by when it could “organically” fit in with the company’s other plans, while also meeting the deadline imposed by by SEC disclosure rules. “I don’t think about regret for things that were always on my path and not really in my control.”
Fortune’s Adam Lashinsky, who was interviewing Pincus, asked if morale was suffering because employee stock options are currently underwater. Pincus first countered by saying that since Zynga uses restricted stock options, they’re not technically underwater. More generally, he said that what keeps people at a company should be an attraction to the mission, so if there are employees who are unhappy because they’re not getting a quick financial return, “You hope they find another opportunity.” That doesn’t mean Pincus doesn’t care about morale, but he said raising morale is more about connecting that larger mission with “what you’re doing next week.”
The company’s dependence on Facebook is widely seen as one of the big reasons for investor antipathy, so Pincus talked about broadening to other platforms and also widening its revenue streams. He said Zynga has been willing to build games for “anywhere that social gaming could exist” — it just happens that Facebook is where that kind of gaming has taken off to to stratospheric heights. The next big boost will come from mobile, Pincus said — and with 22 million daily active users, the company is the largest mobile gaming network today.
He added that mobile, advertising, and real-money gaming (i.e., legalized gambling) are all areas where he expects to see revenue growth. On the last point, Pincus said there’s “a good chance” that online gambling will be legalized in some form, but he warned, “I am not a good predictor of politics.”
There has also been criticism of Zynga’s acquisition of OMGPOP, maker of the popular Draw Something app. Usage of Draw Something has been dropping — does that mean Zynga overpaid? Pincus said “it’s too early to call it after one quarter.” Similar its acquisition of Words With Friends, Zynga bought OMGPOP in the hope of investing in it over the next five years.
“We thought that these could be mass consumer brands and core experiences that we could build off of for the next decade,” Pincus said. “We didn’t in either case buy them for what we thought they’d do in the next two quarters afterwards.”