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Zynga expands game lineup to try to appeal to investors

Zynga CEO Mark Pincus talks about the fifth anniversary of the company behind FarmVille and Words With Friends. Zynga is facing stiffer competition from more experienced companies seeking a larger share of the market for popular digital games.

Associated Press

Zynga CEO Mark Pincus talks about the fifth anniversary of the company behind FarmVille and Words With Friends. Zynga is facing stiffer competition from more experienced companies seeking a larger share of the market for popular digital games.

SAN FRANCISCO — Web game maker Zynga is trying to turn its digital playground into an even more entertaining place, working to prove wrong investors who doubt that it can build a long-lasting business.

Zynga unveiled features Tuesday that include a network designed to provide the more than 290 million players of its games with the same tools, whether they are competing on Facebook's online social network, a mobile device or the company's own website.

The network is called Zynga With Friends. That's a reference to one of Zynga's most popular games, the Scrabble-inspired Words With Friends.

Zynga also previewed several new games, including a food-themed title called ChefVille and a virtual house-building experience called the Ville. Those are the latest riffs on a franchise that began with FarmVille three years ago.

"These games have become something like hobbies for millions of people," Zynga CEO Mark Pincus said to reporters who came to the company's San Francisco headquarters for the presentation.

The addictive allure of Zynga's free games helped establish the company as one of the past decade's brightest Internet stars. Just five years after Pincus founded the company and named it after his dog, Zynga has more than 290 million users worldwide and is expected to generate $1.4 billion in revenue this year.

But investors are worried that Zynga is running out of new ideas as it girds for fiercer competition. The strategy laid out Tuesday evidently didn't provide much reassurance.

After edging up earlier in the session on hopes for bigger news, Zynga shares fell 30 cents, or nearly 5 percent, to close at $5.77. That's well below the company's initial public offering price of $10 six months ago.

The concerns dogging Zynga include its ability to keep churning out popular games, increasing competition from more experienced entertainment companies such as Disney and Electronic Arts, and a shift toward playing games on smartphones that is expected to fragment that industry.

Zynga, which already attracts about 22 million daily users on mobile devices, has been trying to establish itself as a gaming hub and lessen its dependence on Facebook for traffic and revenue.

In March, Zynga began hosting some of its games on its own website. The Zynga With Friends network is meant to ensure some of the features on Zynga.com also are available to players when they are on Facebook or mobile devices. Facebook accounts for 85 percent of Zynga's traffic and 92 percent of its revenue.

Even Pincus' personal fortune is intertwined with Facebook's.

As one of Facebook's early investors, he owns 4.3 million shares in the social network that are worth about $140 million.

Zynga expands game lineup to try to appeal to investors 06/26/12 [Last modified: Tuesday, June 26, 2012 8:12pm]
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