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One of the Internet's greatest success stories in 2010 can be found in a former potato chip factory on Vermont Street in Potrero Hill. This is the original office of Zynga, the S.F.-based creator of online "social" games — FarmVille, a simple application in which participants plant and harvest crops, is the company's best-known product — that in three years has gone from scrappy startup to the toast of Silicon Valley.
Since launching its first Internet game in 2007, Zynga has grown rapidly. The company's true earnings are unknown to outsiders, but industry observers estimate that its annual revenue could now be $500 million or more. In May, social-media analyst Lou Kerner estimated Zynga's total price tag at $4 billion, based on corporate filings for a stock issuance.
In light of Zynga's phenomenal rise, one former senior employee recalls arriving at the company eager to discover what new business practices were driving its success in a market where other popular Web 2.0 ventures struggled to make money. What was Zynga's secret? Not long after starting work, he got an answer. It came directly from Zynga founder and CEO Mark Pincus at a meeting. And it wasn't what he expected.
"I don't fucking want innovation," the ex-employee recalls Pincus saying. "You're not smarter than your competitor. Just copy what they do and do it until you get their numbers."
The former employee, who requested anonymity in order to speak candidly about his experience at Zynga, said this wasn't just bluster. Indeed, interviews conducted by SF Weekly with several former Zynga workers indicate that the practice of stealing other companies' game ideas — and then using Zynga's market clout to crowd out the games' originators — was business as usual.
Criticisms and speculation about Zynga's theft of ideas have been aired before, chiefly in tech-industry blogs that have remarked on apparent design similarities between Zynga's smash hits — including FarmVille, FishVille, PetVille, Café World, and Mafia Wars — and predecessors published by other companies. But company insiders have never discussed the frankness with which Zynga, led by Pincus, based its lucrative business model on exploiting the achievements of competitors.
None allege that Zynga knowingly broke laws. Although the company has been sued for copyright infringement, stealing concepts for games is not in itself illegal. Specific game mechanics and design elements must be copied extensively before intellectual-property protections kick in.
Former employees nevertheless describe a corporate ethos based in a predatory attitude toward rival companies and gamers. Unlike innovative and socially useful business enterprises such as Twitter or Google, Zynga sought to cash in quickly by repackaging, and then furiously peddling, the ideas of others.
As the former senior employee who listened to Pincus rant against innovation recalls, workers at Zynga were fond of joking (albeit half-seriously) that their firm's unofficial motto was an inversion of Google's famous "Don't Be Evil."
"Zynga's motto is 'Do Evil,'" he says. "I would venture to say it is one of the most evil places I've run into, from a culture perspective and in its business approach. I've tried my best to make sure that friends don't let friends work at Zynga."
The derivative nature of Zynga's high-grossing games isn't just an ethical liability. While the company has recently enjoyed a spate of bullish mainstream media coverage, some industry experts say that its star could soon be on the wane. The audience for its signature application, FarmVille, has collapsed by 26 percent from its high of 84 million monthly users. As a new generation of social gamers demands more sophistication in online entertainment, some observers — including at least one of Zynga's founders — question whether the company can adapt.
"You can't make the cheap little viral games like you used to," says Tom Bollich, an early Zynga investor and former lead engineer who owned more than 400,000 shares of the company in 2008, and who has now divested completely. "These games, it's like pouring water into a bucket with holes in it. You can get a lot of people, but they don't stick around."
Officials at Zynga declined to be interviewed on the record for this story, although Dani Dudeck, the firm's general manager of corporate communications, provided contact information for several investors and former colleagues of Pincus'.
Michelle Kim, a public-relations official with Brew Media Relations, which helps handle Zynga's press inquiries, said the company is loathe to cooperate with stories, absent guarantees of mostly positive coverage.
"Unless they know everything about the article, and that there's not going to be anything negative in it, they're probably not going to give anyone up" for an interview, she told SF Weekly. "It's really hard to get them to say yes to press these days."
At a time when traditional "console" videogames — the kind bought in a store and played on a computer or entertainment system such as a Sony PlayStation — aspire to be classified as works of art, it might seem odd that such confections as FarmVille enjoy widespread attention and financial success. In 2007, for example, publisher 2K Games released a spellbinding console game, Bioshock, in which players make difficult ethical decisions in an underwater city-state founded on the libertarian ideals of Ayn Rand.
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