Could Zynga really double its paying fans? CrowdStar's CEO thinks so
According to Relan, this could happen one of two ways: Either Zynga simply grows to engross 300 million unique monthly players (the number of Facebookers is slowly nearing 1 billion globally), or somehow get more like 4 to 5 percent of its existing players to start paying up. Even with the norm for paying players being 2 to 3 percent, this would be quite the challenge for the company, which is poised for its initial public offering this week.
"Could 30 percent [of Facebook users] play Zynga games over time? Yeah," Relan confidently replies. "That doesn't seem like a 60-70 percent number, right? I think [the latter] one is trickier, and not so easy. But I think that the definition of paying will change. I think advertising may become a bigger portion of their revenue, because often times when you have scale--people are not pulling out their credit cards--you can stick ads in front of them and they become monetized users in that way."
As for whether Zynga's current valuation of $6 to $9 billion is crazy, the CrowdStar chief's opinion seems to have changed since Zynga first revealed it would go public. "I think the $20 billion one was a little suspect," Relan admits. So, if it's really in that range [between $6 and $9 billion], I don't think it's totally out of whack. The fact of the matter is that they are the dominant--by far--player in the US social gaming market. And that's a position, as long as Facebook's alive, unlikely to be challenged."
However, Relan spoke to the famed Facebook game maker's internal culture. "[Zynga] has got a 'take no prisoners' style, and that works very well as long as the performance is there." We'll see whether the performance is there this weekend, no doubt.
Will Zynga raise $1.15 billion when/if it goes public this week? For how long can the social games giant keep this up, and could it really grip 30 percent of Facebook users worldwide? Sound off in the comments. Add Comment.