Reports claim that Microsoft was in talks with the social game publisher for an acquisition deal that would complement the launch of the Xbox One.
Without wishing to get too Sliding Doors about it, imagine how different the Xbox One console might have been if Microsoft had acquired social games publisher Zynga in 2010.
Fanciful speculation? Maybe not. Bloomberg claims that Microsoft was in active talks with Zynga three years ago about an acquisition deal, with the talks led on Microsoft’s side by Don Mattrick – the Xbox executive who has just become Zynga’s chief executive.
“The idea was to bolster Microsoft’s Xbox lineup with social games that then were adding millions of users on Facebook Inc. (FB)’s network each week. The discussions ultimately fell apart,” claim Bloomberg’s sources.
Microsoft continued with its drive to make the Xbox 360 a streaming-entertainment hub for homes as well as a games console, while working on its plans for the next-generation Xbox One.
And Zynga? Well, Zynga has had an interesting three years to say the least. Its hotly-anticipated IPO in December 2011 with shares priced at $10 was followed by a year and a half of bruising scrutiny of the company’s financial performance and strategy.
Now, in July 2013, the share price is $3.29 at the time of writing, and Zynga’s founder Mark Pincus has stepped down from his CEO role to be replaced by Mattrick – although Pincus remains chief product officer and company chairman.
Analysis of what went wrong for Zynga continues, but the Bloomberg report shifts it in a new direction: what might have gone right (or, indeed, wrong) if Microsoft had bought Zynga in 2010?
Just as when Electronic Arts bought social games publisher Playfish in 2009, acquiring Zynga would have brought a great deal of knowledge of the emerging free-to-play (F2P) games sector in-house for Microsoft, to be applied to the rest of its business.
We’d surely have seen FarmVille, Zynga Poker and other games on Xbox 360 by now, but the more intriguing thought is how MicroZynga would have affected Microsoft’s plans for the Xbox One – and, indeed, the wider console market – in terms of F2P games.
Facebook social games used the F2P model from the start, and it has turned the mobile games market on its head in the last three years.
You may have seen the stats on the latter trend: $179m of revenues for Finnish developer Supercell in the first quarter of 2013 from two iOS games alone; $303m for Japanese developer GungHo, mainly from its Puzzle & Dragons game; and claims that King’s Candy Crush Saga is earning $633k a day in the US on iOS alone.
Oh, and the stark fact that 44 of the 50 top-grossing iPhone games in the UK right now are F2P games (for the US, it’s 45 of the top 50). It’s not that you can’t make money from paid mobile games – Minecraft and Football Manager Handheld being two obvious examples – but mobile games is almost all about F2P in 2013.
And console? It’s coming, but more slowly. Xbox One launch game Killer Instinct will be free-to-play, with one character available to play for free, and others sold as in-game purchases. World-building game Project Spark will also be F2P from launch.
Xbox 360’s first F2P game was released last year: Happy Wars. Microsoft has since confirmed it sees the model as increasingly important.
“Having a box that is natively connected means that the digital distribution of content be even more prevalent, which I think is a good thing,” Microsoft Studios’ corporate vice president Phil Spencer told Official Xbox Magazine in May this year.
“More service-based games on our system, like Happy Wars, is a good thing – and these services can grow over time.”
Similar trends can be seen on Sony’s PlayStation 3, with Namco Bandai’s Tekken Revolution F2P beat ’em up launched in June, with players spending “Battle Coins” to fight online, with the option to buy more when they run out.
PlayStation 4 already has several F2P games confirmed for release in 2013, including Planetside 2, DC Universe Online, Blacklight: Retribution and Warframe. While some F2P games will require a subscription to Sony’s PlayStation Plus service to play online, publishers will be free to choose not to make this a requirement.
F2P has been making its way onto consoles, then, but the preferred model – and a controversial one in some cases where gamers have felt screwed – is to charge for the initial game then charge again for additional downloadable content.
Which brings us back to Zynga, and how an acquisition by Microsoft might have shaped the company’s future, but also the priority of F2P models in plans for the Xbox One – and in turn, the rival consoles.
The worlds of social/mobile/F2P and console gaming are drawing nearer regardless. There’s a growing buzz in the former industry about “midcore” games: titles sitting in between the “casual” puzzle games (although Candy Crush Saga addicts are anything but casual in their gameplay habits) and deeper console experiences. Clash of Clans being a good example.
This year, it’s the developers of these games who may be more likely to attract the acquisitive attention of Microsoft and Sony as they consider how to bolster their first-party publishing across a variety of platforms, not just their own consoles.
Microsoft may not have bought Zynga, in short. But it would be surprising if the console giants weren’t at least sniffing around the likes of Supercell in 2013.
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