Zynga Wins with Business Intelligence

Only available on StudyMode
  • Download(s): 1338
  • Published: January 19, 2013
Read full document
Text Preview
The Internet and social media websites have provided lucrative business opportunities for many companies. However, one particular success story is Zynga, a gaming company founded by Mark Pincus and a group of entrepreneurs. Zynga is currently the leading developer of social network games, such as CityVille, Texas HoldEm Poker and Farmville. Zynga uses Facebook as its main network and relies on the social media aspect of the website to attract potential gamers to play their games. Clearly this method works, as the three games listed above are the most frequently used applications on Facebook. Statistically, Zynga’s games have 250 million monthly active users, of which generate 3 terabytes of data per day. However, what is unique about Zynga is not their large playerbase, but the way in which they use the ladder of inference format to process the huge amount of data into information and knowledge. Zynga rely heavily on their ‘Business Intelligence’ which can be defined as an Organization’s ability to take all its capabilities and convert them into knowledge. This again can be referenced back to the ladder of inference and a company like Zynga’s ability to convert raw data into knowledge, which can then be used to improve their product. Zynga starts with a game, but then studies data to determine how its players play, what ypes of players are most active and what virtual goods the players buy. It then uses the data to get players to play longer, tell more friends and even buy more goods. Zynga identify data as one of the essential factors in creating business improvements via their reporting and analytics teams. They have identified 3 main metrics that drive the economics of social gaming, which are; •Churn Rate – The loss rate of game players

Viral Coefficient – The measure of the effectiveness of existing player in bringing in new players •Expected Revenue Per User – An estimate of expected revenue, based on monthly revenue per user and the churn rate.

The viral coefficient is an important factor in Zynga’s success. Originally their applications provided too much “wall spam” which made it difficult for users to see posts from friends. Facebook then demanded the gaming firms reduce their wall spam and therefore decreased the viral coefficient. After this Zynga turned to social graph analysis, which looks at the relationships between friends and adjusting their methods of communications appropriately. Zynga are able to do this 50-100 quicker than other competitors due to their use of Vertica’s Massively Parrallel Processing (MPP) system, which is unique n the way is stores and graphs data. This allows Zynga to quickly identify the frequent players from the part-time ones and adjust the amount of communication and also the bonuses available to those players. Zynga are now able to identify groups of users with similar behavioral patterns for even more precise targeting of game-related promotions and activities. Since using MMP Zynga’s revenue has increase from $121 million in 2009 to $600 million in 2010.

What we can refer from these facts is that Zynga appear to be a highly technical company, with the huge amounts of data needed to be processed into information and knowledge, which is then used to improve the three bullet points identified above. They also rely heavily on people’s attitudes toward the company. Such as the wall spam mentioned earlier and Zynga’s constant need to improve their users experience to decrease churn rates and increase viral coefficiency. From the facts, we can also see that their relevant criterion for success is related to user experience and retention. They have identified that user retention and positive experience increase the amount of expected revenue. In reality, Zynga don’t really relate to people’s attitudes but rather people’s data. Although many people believe Zynga is not really a gaming company, the statistics and data they use to consistently produce revenue don’t lie. The...
tracking img