In the company's first call with investors, Zynga CEO Mark Pincus said he wants to use his company's influence to elevate the importance society puts on playing games. The measure of Zynga's future success, he said, would depend more on its ability to do that than anything else.
"We really want to see 'Play' become a mainstream behavior in the West for everyone," Pincus said. "We'd like to see Play reach the level of Search, Shop and Share. Our growth will be driven by the world making play part of their day rather than the next monetization mechanic."
Nonetheless, Zynga has a couple of those monetization mechanics running quite well, seeing large growth with its advertising and user-payment revenue streams. Its fourth-quarter earnings saw a couple of big-name advertisers -- Best Buy and McDonald's -- get on board with the company, and its user base (monthy unique users) grew from 111 million to 158 million.
Zynga COO John Schappert said that growth has a lot to do with how the company develops and markets its products.
"We develop games as live services, more like TV series than one-off movies," said Schappert, clearly alluding to the typical launches and lifetimes of console games. Schappert noted that Zynga Poker, launched four years ago, continues to deliver excellent revenue for the company, with growing user base.
Although the company's growth is healthy, Zynga posted a net loss of $435 million for the last quarter. The company chalks that up to investing heavily in infrastructure and development of future titles, many of which haven't launched yet. While the company spent $727 million total in R&D in 2011, the last quarter accounted for $445 million of that.
Zynga also spent a lot of time in 2011 working on its back-end infrastructure. The company now hosts 80% of its users in its Z Cloud, a proprietary cloud service that links users and holds game software -- up from 20% at the beginning of 2011. As it works over 2012 to bring all of its users on board, some infrastructure costs will go down.
Among its 2011 titles, Zynga execs admitted that Mafia Wars 2 was a disappointment for the company, but that CastleVille, the latest title in the "Ville" franchise, was a surprise hit. Shappert noted that cross-promotion in other Zynga titles was a key ingredient in CastleVille's success.