Zynga Prowls for Fresh Talent at E3
Special to CNBC.com
Zynga will participate in E3 for the first time. But instead of using the media-saturated event to showcase its titles, Zynga's there with another goal in mind: capturing the eye of some of the industry's best talent.
"It was an easy decision," says Rob Dyer, vice president of partner publishing at Zynga. "We have a number of potential partners who will be there. … We did this very purposefully. We knew when we signed up for the space we would have launched Zynga Partners and would have Zynga.com up and running.
"Our intent is to spread the word and, hopefully, have people come up and talk to us. … We are putting together a platform for play – and in order for that to happen, we need third parties. To not be involved at E3 is to ignore a big part of what we need to be successful."
Zynga embraces a completely different business model than other players in the video game industry, so the flash and spectacle of E3 doesn't really help it increase players.
But by attending the show, the company could mute the skepticism it faces from some industry insiders (and core gaming websites), while still creating a distinct identity for itself.
"I think Zynga's a company that straddles a few different industries," says Colin Sebastian, a senior research analyst at Robert W. Baird & Co. "They're an Internet company at their heart, but it's also a video game company — and because in the past they haven't received a lot of respect for the quality of their games, perhaps they want to show of what they have in development."
While Zynga is hoping to recruit partners at E3, Dyer says the company is not there to sniff out possible acquisitions like OMGPOP, which Zynga famously bought for $183 million in April.
The company's also not going wild in its E3 debut. Companies like Microsoft, Sony and Electronic Arts spend tens of millions of dollars at each year's show, creating elaborate booths and sending hundreds of employees to the show. Zynga, though, has sent just a half dozen people, who are centered in a small meeting room.
While E3 is still very much a retail-oriented show (and, given the large media presence, a consumer facing event), the industry at large is changing. And Zynga is betting that evolution will extend to the show.
"E3 is in an bit of transition," says Dyer. "It's no longer just about consoles. It's about games and having an opportunity to talk to the people making those games, whether on the web or mobile. It is where we need to be, so we will have a presence. … I think you will continue to see a transition occur with more and more social companies being involved at E3, but right now it's not at that level. "
Social games (and mobile titles) do have a larger presence at this year's show. EA and Disney are both prominently showcasing those divisions of their companies alongside the console games.
It was, in fact, the growing presence of mobile/social games at industry trade shows that convinced Dyer to leave his position as senior vice president of publisher relations for Sony Computer Entertainment America nine months ago.
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"The thing that struck me last year and influenced my decision to leave Sony was the Tokyo Game Show," he says. "In the past, it was a very big deal about what was coming out on consoles. Last year, there were maybe three or four games outside of Sony's booth that were console games. Everything else was social or mobile — and that was the canary in the coalmine for me. … I believe that over time, you're going to see the same thing occur at E3. You're going to see more free to play games on the show floor."
Zynga was conspicuous in its absence from E3 in 2011. Though the social gaming giant had not yet plunged into publicly traded waters, it was widely recognized as one of the largest companies in the videogame business — and by bypassing E3, it drew a line a sand between the old guard of console gaming and the new guard of mobile and social developers.
—By CNBC's Chris Morris
Follow Chris Morris on Twitter: @MorrisatLarge