In 2019, Zynga was optimistic. In an interview, CEO Frank Gibeau, said, "We're set up for a really strong 2019. We have a good lineup of games to create the base for us, and then we have more than nine games being built right now that will come out over the next couple of years, with a bunch coming in soft launch."1 While battling some rough tides, the company had garnered its reputation as one with inconsistent leadership. In 2013, founder Mark Pincus stepped down and handed the charge to Don Mattrick, a 15-year employee of Electronic Arts expecting to turn the company around. In April 2015, Don Mattrick left the position, and Pincus returned as CEO for the second time. Just a year later in March 2016, Zynga announced the replacement of Pincus by the new CEO Frank Gibeau, another 20-year employee of Electronic Arts, again expecting to turn around the company. Zynga's lack of consistent leadership had been critical to not formulating an effective turnaround strategy that might have led to progress. Throughout the revolving door of CEO replacements, Zynga had not developed a substantially successful new game. Consequently, its revenues have been falling over the past years accompanied by consistent net losses. The company eventually made a com under Gibeau's leadership with strong acquisitions. In less than two years, Zynga acquired Peak Games' casual card game studio, Gram Games and 80 percent of Small Giant Games, maker of Empires and Puzzles, for $560 million. Though Zynga's revenue rose by 5 percent to $670 million by the end of 2018, it still posted a net loss of $15 million for the year (see Exhibits 1 and 2). In 2018, their top three online game revenue-generating games were Zynga Poker, CSR Racing 2, and Hit It Rich! Slots. 0 In another attempt at innovation, Zynga launched Wonka's World of Candy in 2018. After years of struggling to introduce new hit games and failing to combat the decline of formerly blockbuster properties like FarmVille, the company has been focusing on getting the most out of evergreen franchises like Zynga Poker, Words with Friends, and CSR Racing 2 by keeping them alive with updates. The fight to build new games that catch the audiences' attention might be hard, but Zynga's announcement of a multi-year agreement with Disney to develop a new Free-To-Play mobile Star WarsTM game brings an existing fandom as their audience. 

 

Zynga's Background 

At the time it incorporated in October 2007, Zynga had become a dominant player in the online gaming field, almost entirely through the use of social media platforms. Located in San Francisco, the company was named by CEO Mark Pincus to pay tribute to his deceased beloved pet bulldog Zynga. Although this might have seemed whimsical, Zynga was actually a quite powerful company. Exemplifying Zynga's prominence, Facebook was reported to have earned roughly 12 percent of its revenue from the operations of Zynga's virtual merchandise sales. 3 Zynga's collection of games continued to expand, with more and more success stories emerging. A relative newcomer to the market, its quick success was astonishing. However, Zynga's impressive financials were possibly at risk because of what some considered questionable decision making. Many of Zynga's competitors, and even some partners, were displeased with the company's actions and began to show it in the form of litigation. Agincourt, a plaintiff in a lawsuit brought against Zynga, stated, "Zynga's remarkable growth has not been driven by its own ingenuity. Rather it has been widely reported that Zynga's business model is to copy creative ideas and game designs from other game developers and then use its market power to bulldoze the games' originators."+ If lawsuits and ethical issues continued to arise for Zynga, its powerful bulldog could start looking more like a poodle. In January 2019, Zynga received $12 million related to the settlement of the derivative litigation case for insider trading against the directors of the online gaming company. 

 

The Products With an abundance of software developers, the ability to create or distribute online games increases by the day, and the demand to play them is equally high. However, while many people find these online games fun and, better yet, therapeutic, others cannot understand the hype. The best way to understand the sudden infatuation is to view online gaming as simply a means of relaxation. In the movies, at least, large executive offices are often shown with putting greens, dartboards, or even a bar full of alcoholic beverages. These amenities are all meant to serve the same purpose: to relieve stress during a hard day's work. We have all been there and looked for a way to cope. However, few of us have the opportunity to use such things as putting greens to unwind at the workplace. And even if we did, how long could we afford to engage in such an activity before being pulled back to our desks? Stress reduction at work is one of the many purposes that virtual games fulfill-no need to leave our desks; no need to make others C 15 around us aware of our relaxation periods; and, better yet, no need to separate the task of relaxation from sitting at our computers while we work. The ability to play these games on office computers and relax now and then during the day makes online gaming enticing. This, of course, is just one of many uses for the games. Some people play them after work or at the end of a long day. With the onset of smartphones, people of all ages play these games on the go throughout the day sitting on the bus, in the waiting room of a doctor's office, or at the Department of Motor Vehicles. 

 

Diverting gameplay is readily available with the click of a button. Market Size Compared to other game developers with games present on the Facebook platform, Zynga had once been a dominant force, but by 2019, it ranked third after Miniclip's 8 Ball pool and King's Candy Crush Saga (see Exhibits 3 and 04). Miniclip, with its wildly popular 8 Ball Pool game, appeared to rule, making a reported $400 million with just in-app purchases.5 Table of Contents Zynon's virtual games provided the opportunity for constant buildup and improvements, offering users virtual goods and services to increase their gaming experience. These items could be purchased using a credit card and were often needed to accomplish fast progressions in the games. These goods were advertised throughout the games and the user was enticed by price cuts for larger purchases. Zynga's virtual games could be played both remotely and through social media platforms, most commonly Facebook. Five of Zynga's games -FarmVille, CityVille, Empire and Allies, Castle Ville, and Texas HoldEm Poker-were among the most popular games on Facebook. 

 

Of course, Zynga was not the only virtual-gaming company striving for this degree of success. In the past 10 years, many other gaming companies have grabbed the spotlight. The capability to create online games is widespread. Creativity and innovation are accepted to be the grounds on which competing companies challenge each other. With all competitors after the same audience, the industry is prone to a significant amount of head-butting rivalry. 

 

Background of Competitors 

Activision Blizzard is an interactive entertainment company that is based in Santa Monica, California. After acquiring King Digital for $5.9 Billion in 2016, Activision Blizzard had five business units including Activision Publishing, Blizzard Entertainment, Major League Gaming, Activision Blizzard Studios, and King. It is credited for some of the top games in history including Candy Crush Saga, World of Warcraft, and Call of Duty. In 2018, the company made a revenue of $7.5 billion, ranking fourth in video games after Sony, Microsoft, and Nintendo. In June 2017, alongside Electronic Arts and Atari, Activision Blizzard earned a spot on the Fortune 500 list.7 

 

Activision has invested in careful strategic partnerships to enhance global growth. In 2019, Blizzard Entertainment and NetEase C 18 extended their China partnership until 2023. This partnership will enable Activision franchises to be available to Chinese users in the coming years. While Chinese revenues constitute only 5.2 percent of ATVI's top line, the market growth potential in China is astounding with Niko Partners projecting one billion Chinese gamers by 2019.8 NetEase, headquartered in Guangzhou, China, was founded in 2001 by Ding Lei. Some of NetEase's games include Knives Out, Identity V, Onmyoji, Rules of Survival, and Fantasy Westward Journey. 

 

In 2014, the company expanded into the west launching its U.S. headquarters. NetEase's revenue was $9.768 billion in 2018. NetEase invested $100 million in the American video game developer Bungie for a minority stake in the company and a seat on the company's board of directors, Exploiting the demand for shooting games such as PUBG and Fortnite, NetEase announced the launch of its new shooter game Disorder. The company maintained its game Knives Out's position as China's top-grossing mobile game in overseas markets for five consecutive months since August 2018.10 Although NetEase is performing well with games, firm management is looking beyond video games for NetEase's future successes. CEO William Ding said it will focus on the promising e-commerce, music, and online education segments; the company intends to make substantial investments in those areas as part of its broader business strategy for 2019.11 Epic Games is the creator of Fortnite, Unreal, and Gears of War, Shadow Complex, and the Infinity Blade series of games. Epic's Unreal Engine technology brings high-fidelity, interactive experiences to PC, console, mobile, AR, VR, and the Web. According to the Bloomberg Billionaires Index, Fortnight alone is on track to generate $2 billion this year, making Epic Games worth $5 billion to $8 billion. 12 Epic Games announced that it will launch its digital storefront with a "hand-curated" set of games, with the first wave rolling out on Mac and Windows before broadening to Android and other platforms later in 2019.13 With an estimated revenue of $1 billion in the previous year, Epic acquired 3Lateral in January 2019.14 Known for its "digital human" creations, 3Lateral uses a combination of digital technology, motion capture, and other tools to create photo-realistic human subjects in real-time. to le soul OOK Ban My D agreement with yngd, allowing yngd ac 101 DocTaApps rac папке тоа што compensation. According to the suit, Zynga was given the code but failed to pay SocialApps. SocialApps claimed that MyFarm's source code was the foundation of Farmville, as well as many of Zynga's similar games.22 Following Zynga's release of the game Hidden Chronicles, Forbes' Paul Tassi wrote that Zynga "refuses to innovate in any way, and is merely a follower when it comes to ideas and game design."

 

Ethical issues, though less tangible and definable than intellectual property, were equally troubling in assessments of Zynga's operations. A former employee of the company revealed firsthand quotes from past CEO Mark Pincus, such as: "You're not smarter than your competitor. Just copy what they are doing and do it until you get their numbers." One contractor said he was presented with freelance work from Zynga related to imitating a competitor's application and was given precise instructions to "copy that game." 24 Other past employees, even those at the senior level, spoke out about the corrupt ways that Pincus had apparently decided to operate the business. 

 

A former high-level Zynga employee provided an insight into the company's culture, as regarding any emphasis on creativity and originality. According to the employee, a group of designers brought a new and innovative idea to the table, only to have it turned down by Pincus because of his wariness toward a new idea that didn't fit the "tried-and-true" mold of other successes.

 

Zynga was accused of taking advantage of its end customers, pertaining to a lack of security and safekeeping of consumer information. The Norwegian Consumer Council filed a complaint against Zynga to the Data Inspectorate concerning breaches of the Data Protection Act. According to the Consumer Council, Zynga's terms of use "do not offer a clear description of what is being collected in terms of information or what this information is being used for. Nor do they state how long the information is stored for or how it is protected against unauthorized access." 

 

Zynga Going Forward 

Although Zynga game users tend to be pleased with Zynga's games, many note there seem to be recurring obstacles that limit that pleasure. Many Zynga users complain of lag time while playing the games. Even more complain that when problems arise, Zynga support staff are nowhere to be found. The company has no customer service initiative and forces users to resort to sending their claims through e-mail, which many believed is ignored or never read. Further, many believe that the company makes it too difficult for users to make real strides in the games without spending ridiculous sums of money. Based on their experiences, many users believe that Zynga is all about revenue generation and that everything else comes second. 

 

As Zynga looks to its optimistic future, where might its next big hit come from? With all the criticism aimed at Zynga's past behavior, will the company continue on the path it has become notorious for and will the more than nine games" that Zynga has lined up for the next few years get into trouble? With all eyes on the company as it recovers, it certainly will not be easy for Zynga to get away from its earlier reputation. 

 

Learning Outcome: Assess the leadership, ethical outcomes, and organizational development needs associated with a firm's strategic goals

 

1) Analyze the leadership, ethical consideration, and organizational structure of Zynga and the factors that contributed to its current state. Please use various leadership and ethical principles in your analysis.

2) Provide at least two (2) evidence-based recommendations for leadership or structure changes to resolve problems or leverage strengths in these areas. Include a timetable and resource needs for each recommendation.