If you’re a fan of endless runner games like Temple Run, starting today you’ll get your chance to do more than outrun a pack of demonic monkeys — you can take on your friends, too, with Zynga’s new title Running With Friends.

That’s the basic distinction that Travis Boatman, Zynga’s senior vice president of mobile, offered when describing the game to me. There’s already “a huge group of players that love these games,” he said, but they aren’t able to “play with friends and family the way that I can in Words With Friends.” At the same time, even though the social component is Zynga’s main addition, Boatman said the team was also focused on making sure the core gameplay was fun.

That gameplay involves running through the streets of Pamplona, Spain, during the annual Running of the Bulls. As players try to keep ahead of the bulls, they also smash obstacles like haystacks and barrels to improve their scores. If they’re feeling particularly daring, they can jump on the back of a bull. As they race, they can compete with friends in a turn-based fashion, each player trying to best their friends’ time on the same level, and also trying to move up the game leaderboard.

Although I have had my share of intense Words With Friends gameplay, this seems a little more fast-paced and action-oriented than the other titles in the With Friends franchise, which tend to have their roots in board games. However, Boatman said Running With Friends is linked to the rest of the franchise because of its asynchronous gameplay and its aim of being “very approachable” to casual gamers. (Plus, it uses the same login system as the other With Friends titles.)

The game actually launched in Canada back in March, but today is its global launch on iOS, with an Android release promised shortly. This comes after some disappointing titles led to a relatively slow period for new releases from Zynga — during its most recent earnings call, executives said that the company is planning to accelerate its launch schedule again, and that both Draw Something 2 (which launched in late April) and Running With Friends were showing some of the best internal scores that the company has seen.

Zynga is also announcing Dunkin’ Donuts as a promotional partner, with Dunkin’-sponsored tips appearing in the game, and plans for Dunkin’-branded in-game rewards and boosts.

Running With Friends was designed by team members who had previously worked on Scramble With Friends — they worked with Eat Sleep Play, the developer of Twisted Metal. Zynga said Eat Sleep Play built a custom 3D engine as well as helping out with art, animation, and other aspects of the game.

For today’s launch, Zynga didn’t provide me with an advance copy of the game, just a video illustrating the gameplay. I did, however, get a chance to play once or twice during a company dinner with journalists earlier this year. As with other endless runners, I got caught up in the race pretty quickly — though it was only a few seconds before the bulls caught up and gored me.

You can download Running With Friends here.

Zynga hasn’t been releasing as many new titles in recent months, but things are about to pick up again, executives said during today’s conference call discussing the company’s first quarter earnings report. In fact, they said they’re launching a big new title later today — Draw Something 2.

Chief Operations Officer David Ko said that there’s been “a little bit of a pause in our title slate.” Behind the scenes, he said, the company has been reorganizing and reassessing its lineup, with a focus on four core genres (casual, casino, mid-core, and invest-and-express games), but we can “expect to see an uptick in our number of launches in the back half of the year” — though he didn’t offer a specific number.

The company’s revenue declined 18 percent year-over-year and bookings were down 30 percent; its outlook for the next quarter isn’t promising, either. One of the analysts on the conference call asked whether, as Zynga navigates its transition to mobile and launches new titles, we can expect the next quarter to be the “trough,” with bookings picking up again afterwards.

Chief Financial Officer Mark Vranesh responded that when it came to the second-quarter outlook, “We’re not presuming that aggregate bookings from new releases are going to offset declines from existing games. … That goes to DS2 as well.” As for whether things will pick up in the back half of the year, Vranesh said that’s what the company is hoping if its new launches go well, but he also cautioned that this year will be “bumpy.”

To that point, another analyst asked what Zynga can learn from its recent launches — particularly the fact that FarmVille 2 has succeeded while other attempts to turn games into franchises has not. One of the main lessons of FarmVille 2, according to CEO Mark Pincus, is that “when we combine our best brands with our best teams and their passions we see almost magical results.”

Ko added that while it’s impossible to know for certain which titles will turn into successful franchises, Zynga employees have been testing Draw Something 2 and Running With Friends internally, and they’re showing “some of the highest fun scores within the company.”

Looks like Baidu and Zynga are the most recent victims of a bogus press release stunt. This morning, a company called PR*Urgent put out a press release saying that Baidu — known as the “Google of China” — wanted to acquire Zynga, the social gaming giant. It claimed Baidu offered to pay $10 per Zynga share in cash. But a PR representative for Baidu has categorically denied the news. “Baidu had nothing to do with this news release,” he told TechCrunch.

The release recalls an incident from November last year, when a press release agency called PRWeb distributed false news that Google would be buying WiFi technology company ICOA for $400 million. The news was picked up by a lot of outlets (including TC, I hate to admit), but both companies debunked the news, and PRWeb apologised for the hoax. Like PRWeb, PR*Urgent offers a “free” distribution service.

As with the Google/ICOA incident, it looks like the Baidu/Zynga news may have been put out either as a prank, or an attempt to boost Zynga’s stock price, or lower Baidu’s.

Zynga closed Friday trading at $3.19 per share, and is up 3.45% in pre-market trading. Baidu closed Friday at $86.43 per share. Both Zynga and Baidu will be reporting their quarterly earnings this week, Zynga on April 24, and Baidu on April 25.

The bogus release claims that Baidu’s interest in Zynga was based on its foray into real-money gambling. “The acquisition will enable Baidu to supercharge Zyna’s new ‘real money’ gaming and will enhance competition in mobile and internet gaming,” the fake press release notes. “Baidu’s user base would be a huge boost to Zynga’s business model, Baidu has upwards of 500 million users. Given the company’s recent setbacks, Zynga really needs a win—and if that comes via real people gambling real money, then all the better.”

Back in the real world, Zynga, of course, really is embarking on a real-money gambling business — pursued as Zynga looks for further ways to monetize its gaming platform amid overall growing competition in social and mobile gaming. That strategy finally saw its first launch earlier this month, in the UK. There are further rollouts expected in Europe, Asia and the U.S.

While most rubbish like this isn’t worth reporting, we’re putting this out because at this moment, the release is coming up near/at the top of Google News searches for both companies.

And if you know anything about Baidu’s business — strong on search, but looking to grow that by going big on mobile, increasing moves into gaming and other content, and international growth — there’s just enough of a kernel of truth there to give some pause to people browsing if they don’t bother to look a little deeper.

Zynga, the social games company that is now expanding its business into real-money online gambling, is today announcing a new heavyweight on its board of directors: John Doerr, a general partner at venture capital firm Kleiner Perkins Caufield & Byers.

Doerr also sits on the boards of a number of other tech companies, including Coursera, Flipboard and Google. He will join existing Zynga board members William “Bing” Gordon (also at KPCB), Reid Hoffman, Jeffrey Katzenberg, Stanley J. Meresman, Sunil Paul, CEO Mark Pincus, Ellen F. Siminoff and Owen Van Natta.

KPCB was one of Zynga’s biggest VC backers before it went public in December 2011, with Doerr leading those investments. It’s unclear exactly how much of Zynga is now owned by Kleiner but BI puts it at 10%.

Doerr always held the company and founder and CEO Mark Pincus in very high regard. In 2010, when Zynga was still a private company, he once described it as the “most rapidly growing, most profitable, with the most happy customers that Kleiner Perkins has ever backed.”

Adding a board member who has been a supporter of the company from its pre-IPO heyday — and a pretty legendary one at that — sends a message of continuity and support to both staff and investors at a time when Zynga trying to turn itself around into revenue growth.

“John has been a supporter of Zynga since our early days, and truly understands our core values and mission,” said Pincus in a statement. “John has worked with some of the most well-known companies in the world at every stage imaginable and his experience helping teams innovate at scale will be a tremendous asset for our leadership team. I’m personally looking forward to working closer with John, a true pioneer in the consumer internet space, and welcoming him to the board as a trusted advisor through this pivotal, transition year. John inspired us all to pursue creating internet treasures. He is a true missionary and will deepen and strengthen our DNA.”

Doerr will bring significant expertise in helping Zynga build itself out in the next stage of its life as a sustainable digital content business, with the emphasis on gaming on more platforms and in more guises.

“In just five years Zynga has connected hundreds of millions of people to their friends for fun. What’s exciting is this is still day zero – just the beginning — of social gaming’s potential,” said Doerr. “With its deep talent and multi-platform technology, and millions of happy customers, Zynga will engage more of us wherever we play – whether on the web, phones or tablets. I’m excited about working with Mark and the Zynga team in its next chapters of growth.”

Zynga blew up in its startup days, riding the wave of social gaming that came with the rapid growth of Facebook to pick up hundreds of millions of users. But since going public, the company has fallen on more difficult times. A lot more competition on the social gaming landscape, and changing public tastes, have resulted in a number of games and studio closures for the company amid disappointing revenues and cost-reduction strategies, and its stock price dropping nearly 64% since first going public.

That has also driven Zynga to turn to games that might generate better profits, such as real-money gambling. Its first efforts in that area went live this week in the UK, with the plan being to extend that to other markets in Europe, the U.S. and elsewhere as regulations and partnerships allow.

Those efforts have so far had an immediate boost for the company’s stock price, seeing it jump some $0.40 on the news on Wednesday, although that enthusiasm seemed to have died down a bit by the end of Thursday. Meanwhile, the company is slowly levelling out its wider business. Last quarter it reported flat revenues of $311 million, but that also beat market expectations.

Full release below.

ZYNGA APPOINTS JOHN DOERR TO BOARD OF DIRECTORS

SAN FRANCISCO – April 5, 2013 – Zynga Inc. (NASDAQ: ZNGA), the world’s leading social game developer, announced today that John Doerr, General Partner of Kleiner Perkins Caufield & Byers, joined the company’s board of directors.

“John has been a supporter of Zynga since our early days, and truly understands our core values and mission,” said Mark Pincus, CEO and Founder, Zynga. “John has worked with some of the most well-known companies in the world at every stage imaginable and his experience helping teams innovate at scale will be a tremendous asset for our leadership team. I’m personally looking forward to working closer with John, a true pioneer in the consumer internet space, and welcoming him to the board as a trusted advisor through this pivotal, transition year. John inspired us all to pursue creating internet treasures. He is a true missionary and will deepen and strengthen our DNA.”

“In just five years Zynga has connected hundreds of millions of people to their friends for fun. What’s exciting is this is still day zero – just the beginning — of social gaming’s potential,” said John Doerr, General Partner,Kleiner Perkins Caufield & Byers. “With its deep talent and multi-platform technology, and millions of happy customers, Zynga will engage more of us wherever we play – whether on the web, phones or tablets. I’m excited about working with Mark and the Zynga team in its next chapters of growth.”

Doerr joined KPCB in 1980, and has backed some of the world’s most successful companies, including Google Inc. (GOOG),Amazon.com Inc. (AMZN) and Intuit Inc. (INTU). His passion is helping entrepreneurs create the “next big thing.” John currently serves on the boards of several Internet technology companies, including Coursera, Flipboard and Google.

Doerr started his technology career in 1974 at Intel, and later founded Silicon Compilers, a VLSI CAD software company, and co-founded @Home, the nationwide broadband cable Internet service. Outside of KPCB, Doerr supports NewSchools.org,TechNet.org, the Climate Reality Project andONE.org.

Doerr joins Zynga’s distinguished board members: William “Bing” Gordon, Reid Hoffman, Jeffrey Katzenberg, Stanley J. Meresman, Sunil Paul, Mark Pincus, Ellen F. Siminoff and Owen Van Natta.

This morning, as it said it would, gaming giant Zynga turned on Zynga Plus Casino and Zynga Plus Poker, its first real-money gaming sites, letting residents, initially only in the UK, deposit money to gamble online.

Anyone who has visited a real-world casino knows that the odds are stacked against you when you gamble. And Zynga’s new sites remind us that the same goes for virtual casinos, too. I’ve been playing Zynga’s games for the last half hour and have yet to win anything with my own hard-earned cash, but I have done a little better playing with Zynga’s play money.

You first need to register to get going on the site. Although Zynga gives you the option to play some games with play money — to test the waters — registering includes a requirement to enter payment information and put some real money on to the table.

Interesting to note that although Zynga is opening this first in the UK, users can already deposit five different currencies — pounds, dollars, euros, yen and Canadian dollars. The company does plan to extend into further markets where online gambling is regulated and Zynga is permitted, so perhaps it makes sense that it would be turning on that facility now.

I grew up in Las Vegas, and at different points both of my parents worked in casinos. But neither of those facts seem to have translated to me being much of a gambler. So, after depositing the absolute minimum of money into my new account — £10 was the requirement — I went straight for the low-hanging fruit: slots. Zynga, whose real-money efforts are being led by online gambling veteran Maytal Olsha, has been doing its research and knows that simple games like slots are the most popular way of bringing people on to the platform.

So for now this is where the bulk of the catalog rests, with 120 slot machine games on launch, many of them extensions of Zynga’s already-popular social gaming brands. You can see also how Zynga could use this in the reverse: popular brands that it might develop on its gambling portals could start to make appearances in its social games, too.

Other games are a bit more anonymous:

To play game you are taken to a little screen where you place your bet. Once you’re logged into the system you don’t need to add any security details for subsequent bets. Bets start at £0.01 per play for some of the slots, to £1.00 for table games like BlackJack. Popular branded games, like Farmville slots, start at a minimum of £0.30 per play.

I’ve so far not been able to play the more sophisticated games with my own money, because Zynga requires you to credit a higher amount to your account than I was prepared to deposit. But what it does offer is an option to play some of these with Zynga’s pretend money. There, I’ve been winning a few hands, but overall still looking at my basic account slowly diminishing.

The Poker site I’ve not gotten to work yet but this is what the welcome screen looks like so far:

Nor have I been able to activate the ehanced version of the site that you get when you add a desktop app. This apparently enhances and improves the experience for users, and Zynga is enticing users to go that extra mile also by adding more jackpots for those who download software, rather than simply opt for “Instant Play” online. This option, however, only appears to be open for Windows users at the moment — and I’m on a Mac.

As Kim noted yesterday, the UK online gambling market is already pretty competitive. But in its favor, Zynga has is some very strong wattage in the form of existing branding with some of its most popular social games leading the way in its online gambling efforts. While a lot of online gambling has been attractive for actual gamblers, what Zynga could bring to the table is a whole new class of people who have been initiated through its virtual-currency and free casual/social games, making it less of a niche activity and more of a recreational one.

The company has been slowly laying the groundwork for the gambling foray and launching now in the UK gives it a good place to test out what is working and what is not for when it extends online, real-money gambling to further countries later this year in Europe and beyond (those supported currencies should be one clue to where Zynga would like to go next, regulators allowing).

Given that Zynga built its business around social gaming, it’s noticeable how absent this is from the real-money experience. That could be because Zynga is testing out how people play its games when they are more anonymous — perhaps even more important for real-money games, where there may be some stigma attached to gambling, and moreso if you are losing horribly. But given how close social is to Zynga’s DNA it’s likely that we will see some walled-garden social elements appear here, too. There may even be some already in the poker rooms — which I have yet to be able to visit.

That’s not to say that Facebook and other platforms won’t be coming soon, given that both Facebook and mobile are already big businesses for Zynga.

Zynga CIO Debra Chrapaty has a new job as the CEO at Nirvanix, the Khosla Ventures backed enterprise storage company that she expects to further compete with Amazon Web Services (AWS) and extend into the business analytics market.

Chrapaty initially joined Nirvanix last November as chairwoman of the board when Khosla became lead investor in the company that is also funded by Intel Capital. She replaces Dru Borden, who will remain a part of the Nirvanix leadership team as senior vice president of planning & development and remain as a board member Chrapaty will start her new job in April.

Chrapaty led Zynga’s build out of its infrastructure. While there, Zynga became AWS largest customer before she directed the build out of the company’s own gaming cloud.

Prior to Zynga, Chrapaty worked at Cisco, helping direct the development of its collaboration platform. Before Cisco, she worked at Microsoft where she said in an email she built out Windows Azure.

Nirvanix has earned a place in the market for its capability to store petabytes of data. Chrapaty said the company builds out storage infrastructures for the cloud, on-premise or hybrid. Its technology replaces more traditional technologies like magnetic tape and EMC/ NetApp boxes.

She said the company has an opportunity to build out an analytics stack. With that in mind, I asked if Nirvanix also plans to offer compute capabilities? She said she need to explore what an analytics stack would look like.

Chrapaty echoes what is becoming a roar. Fortune 1000 companies are embracing the cloud. And storage needs a home.

That’s a good thing for Nirvanix but also AWS, Windows Azure, Box, Dropbox and the host of other companies looking to carve a niche in an increasingly commoditized storage market.

(Lead Photo credit: Seattle Post-Intelligencer)

Last March, Zynga announced its ambitions to create a web and mobile platform for social games. Zynga.com is a destination for both the company’s own games as well as for third-party developers who want to leverage Zynga’s social feed and users. In September, Zynga debuted its first third-party games. And today, Zynga is rolling out a number of changes to Zynga.com, namely how you sign in.

The platform itself allows developers to post to the stream of social gaming activity at Zynga.com, and also to include social features like chat and real-time multiplayer. One of the major changes with this update is how players sign in. Previously, you signed in via your Facebook login, and your experience was built around all your previous Zynga gaming interactions on the social network (based on your permissions). With the new sign-in, you actually sign in with a Zynga account that is created and Facebook Connect is optional.

You can still integrate all of your Facebook game boards, progress and friends, but this is no longer required. Reading between the lines, it appears that Zynga wants to continue down the road of becoming less reliant on Facebook for social interactions and more. This isn’t particularly surprising considering Zynga and Facebook’s new terms that were released late last year. As part of the agreement at the time, the Zynga.com platform was no longer obligated to use Facebook ad units and Facebook credits. In exchange, Zynga’s right to cross-promote its non-Facebook games using Facebook data and email addresses are limited by the standard terms.

Since launching, Zynga has noticed a number of things about how people are playing games on the platform, namely that people want to be challenged and they want the ability to progress faster.

For example, on the social stream, you can see who else is playing a current game (and your friends), and by interacting in the stream, you can share gifts to the community. So if you are in FarmVille, and you needed a specific tool, you could share this to your social stream, and any friends could click on this to send you the gift as a reward for interacting with the stream. Zynga does keep track of how many people you have helped.

It’s not only a way to showcase the millions of players that are playing with you, but it’s also a way to actually share gifts and benefit not only yourself within a game, but others. Seventy percent of players on Zynga.com are interacting with the social stream, and some are clicking more than 100 times a day.

Zynga also found that interweaving ads within the stream was better for players in terms of monetization than a static ad across the bottom of the page. The company has also been experimenting with actions like watching a video ad to get through a segment of a game.

Right now, Zynga is shipping more third-party games on Zynga.com than in-house. There have been more documentation, SDKs and tools (even a help forum) added to aid developers in building games around the platform.

It’s no secret that Zynga is rethinking its approach to gaming at the moment. The company has shut down a number of once-popular titles and is releasing fewer games and spacing their releases further apart. Zynga’s Q4 saw layoffs and a continuing series of executive and mid-level departures. It’s clear this is a transition point for the gaming company, but the Zynga.com network is one of the areas that the gaming giant is doubling down. The goal is to figure out what’s sticky for both the player and the developers, and it’s a challenge to find a balance on both fronts.

Y Combinator-backed Kamcord got off to a strong start last year — it locked up a hefty seed round which Chinese incubator InnovationWorks just recently added to — and now co-founder/CEO Matt Zitzmann says the team has its sights set on hitting some lofty usage goals.

For the uninitiated, Kamcord is an SDK for iOS that allows mobile game developers using a handful of popular game engines (think Unity, cocos2d, and the like) to quickly and easily add support for <a target="_blank" href="“>recording in-game video without totally killing game performance.

Zitzmann says that February was the startup’s most active month yet — gamers saved 200 million recordings of their exploits in that month alone. Not too shabby considering that Kamcord only officially launched last August, and Zitzmann sees that one big month as a portent for bigger ones to come. “It’s still a long way away,” he said. “But looking at the numbers and trends, we think a billion videos a day is very possible.” Now early momentum is one thing, but that’s quite a weighty ambition and one that’s entirely contingent on a strong mobile gaming market and buy-in from developers.

For now it seems as though Kamcord is faring well on both of those fronts — playing games remains one of the most prominent uses for smartphones, and Kamcord has been steadily raising its profile among developers over the past few months. The in-game recording feature was only baked into 22 apps at time of launch, but these days that number has swelled to over 80 since then. Recent changes like a more streamlined sharing UI and a greater focus on sharing videos within games rather than on social networks like YouTube and Facebook are meant to get users recording and engaging with the game with fewer hurdles than before.

It’s that sort of scattershot approach that Zitzmann hopes will help propel Kamcord past the billion daily video threshold. At this point Kamcord is hustling to ingratiate itself with as many game developers as possible — the idea is as one Kamcord-enabled iOS game begins to wane in popularity another one (or hopefully more) will begin to pick up steam and rise through the App Store charts. Granted, it’s not exactly a foolproof plan, but it turns out that support from one developer in particular could act as an anchor for the startup down the road.

Zitzmann confirmed that the social gaming mavens at Zynga have taken note of Kamcord’s approach to mobile game recording and are testing the feature with a small number of Scramble With Friends players. “We’re really excited to be testing Kamcord,” Zynga product lead Andrew Huang noted. “Video is a great way to drive retention and discovery of our games.” There’s no firm timeline for if/when Kamcord support will find its way to more Scramble players (or, for that matter, more Zynga mobile games) but it could be a huge coup for the startup — if the relationship with Zynga pans out and the Kamcord team makes good on its plans to expand into Android games, hitting a billion video recordings a day may happen sooner than they think.

According to InsideSocialGames, Zynga and EA have settled their legal dispute over the former’s alleged copying of EA’s popular game “The Sims.” It was clear to many that once Zynga started teasing “The Ville,” it took some major elements from EA’s classic. A source has told TechCrunch that no money has exchanged hands as part of the settlement.

At the time of the lawsuit, companies threw barbs back and forth with EA alleging that Zynga “doesn’t understand copyright.” Details as to what the terms of the settlement are haven’t been made available, but we’ve reached out to both companies, and people familiar with the case, for more information. At one point, Zynga countersued for “anti-competitive” practices, turning this into an online gaming bloodbath of epic proportions.

Things quieted down since August, and today it appears that both lawsuits are resolved.

EA and Zynga spokespeople have issued the following statements:

EA and Zynga have resolved their respective claims and have reached a settlement of their litigation in the Northern District of California.

Here is the copy of the proposal to dimiss the case, via AllThingsD:

eavszynga

This is developing.

[Photo credit: Flickr]

During this afternoon’s fourth-quarter earnings call, Zynga announced three more game shutdowns — CityVille 2, Party Friends, and The Friend Game.

The most notable closure was probably CityVille 2, since it was the sequel to what was once Zynga’s biggest hit. However, the game’s traffic has plummeted. COO David Ko blamed some of CityVille 2′s failure on a lack of lead time to properly test the game.

Zynga had earlier announced a cost-savings plan that saw the shutdown of 11 titles. This year, the company will be releasing fewer games and spacing their releases further apart, Ko said. He also said that many of those new games have significant franchise potential.

Not all of the news was bad. Zynga’s earnings actually beat fourth-quarter analyst estimates, and during the call it touted a big milestone for FarmVille as well as the successful launch of its sequel.

The launch of FarmVille 2 was one of the big highlights of Zynga’s past year, but CEO Mark Pincus said its predecessor FarmVille crossed major milestone too, having reached $1 billion in total player bookings.

Seeing an old game reach cross the $1 billion mark may not tell us much about Zynga’s future or current finances, but it still seems appropriate (or symbolic, or something) that FarmVille crossed that line as the focus shifts to its sequel. Speaking of that sequel, Zynga had said a month ago that the game had 40 million monthly active users and 8 million daily active users. Today it also said that bookings from the game had exceeded Zynga’s predictions by 100 percent. And Pincus said FarmVille 2 will be coming to mobile this year.

Those numbers were shared during Zynga’s fourth quarter earnings call, as part of a larger discussion how the company is doing in the “investment and express” category. At the same time, Pincus said Zynga’s “pipeline is heavily weighted toward mid-core” games that are aimed at a less casual audience.

Overall, Zynga beat analyst estimate for the quarter, with revenue flat compared to last year.

Zynga’s revenue was flat year-over-year amid a tough fourth quarter that saw layoffs and a continuing series of executive and mid-level departures.

The company’s revenue came in at $311 million and the net loss was $48.6 million for the quarter, with non-GAAP earnings at 1 cent per share. Analysts had estimated that Zynga’s fourth-quarter revenue would come in at $212.1 million with a loss of 3 cents per share. Bookings were down 15 percent year-over-year, to $261 million.

“The biggest highlight of the quarter was seeing our team deliver a successful sequel in FarmVille2, a next generation social game that offers cutting edge 3-D experiences loved by millions of FarmVille fans,” said founder and CEO Mark Pincus in the earnings press release. “In 2013 we’re excited to bring this new class of social games to mobile phones and tablets and build a network that offers an easier, better way for people to play together.”

The release includes engagement numbers across Zynga’s titles (not FarmVille specifically). The company saw 56 million daily active users last quarter, a slight increase from 54 million during the same period last year, but down from 60 million last quarter. It also saw 298 million monthly active users, up 24 percent year-over-year but down 4 percent from the last quarter.

For all of 2012, Zynga is reporting revenue of $1.28 billion (up 12 percent) and a net loss of $209 million.

A year ago, Zynga’s fourth-quarter revenue came in at $311.2 million. But over the past year, Zynga’s network on Facebook has bled users while other casual game developers like King.com have risen in the rankings. At the same time, while the company has transitioned to mobile platforms and probably has the largest network of players on Android and iOS, it hasn’t been fast enough to compensate for a tougher environment on the Facebook platform.

Zynga engaged in significant cost-cutting measures this quarter to bring the company back to the brink of profitability. It closed more than 10 titles, had layoffs in its Austin office, and closed the Boston and Tokyo offices. The company has also seen more senior-level departures in the past few months, including Treasurer Mike Gupta and chief game designer Brian Reynolds.

But perhaps the very worst of the news has already been priced in. At a market capitalization of $2.1 billion, Zynga has an enterprise value of roughly $450 million over the $1.65 billion they have in cash, short-term, and long-term investments.

Despite the negative flow of news, shares rallied as much as 6 percent this morning on hopes of a surprise from a strong FarmVille 2 performance. Zynga recently said the game was seeing 8 million players per day. As of 4:32pm Eastern, Zynga is up 5.84 percent in after-hours trading.

In the release, COO David Ko describes 2013 as “a pivotal transition year” for the company: “We are focused on achieving three strategic objectives: growing our franchises on mobile and web, expanding our network and maintaining profitability on an adjusted EBITDA basis.”

Another key member of Zynga’s team has left the beleaguered social game maker. This time it’s chief game designer Brian Reynolds, as reported on Bloomberg. The company confirmed Reynolds’ departure, but did not offer any details about why Reynolds is leaving or his last day. In a statement, Steve Chiang, president of games, said:

“Brian has a long history in the game industry and has been a great partner to the creative leaders at Zynga. I want to thank him for his leadership of the Zynga Baltimore studio in the design and development of FrontierVille, which brought many innovations to social gaming. We appreciate Brian’s contribution and we’re proud of the deep bench of creative leaders who are leading the next wave of game innovation at Zynga. We wish Brian the best in his next chapter.”

Reynold has worked at Zynga since 2009, when he was hired to found and lead Zynga East in Baltimore. Prior to that, he was a co-founder and the CEO of Big Huge Games. Reynolds was a lead designer on games including Civilization II and Alpha Centauri.

This is the latest in a series of high profile executive exits over the past year. In November, treasurer Mike Gupta left to take on a new role as vice president of corporate finance and treasurer at Twitter. Gupta’s exit came the same week as CFO Dave Wehner, who left Zynga to take a job at Facebook. Other resignations since summer 2012 include COO John Schappert, infrastructure CTO Allan Leiwand, chief creative officer Mike Verdu, chief marketing and revenue officer Jeff Karp, chief security officer Nils Puhlmann, among others. In addition, the company also had a mass layoff in October, including the closing of its Boston office. Zynga replenished its executive roster with a series of new hires, but the company’s shares have struggled over the past year, falling more than 80% since the beginning of March.

Executing the cost-reduction plan CEO Mark Pincus announced in November, Zynga has shut down, pulled from the app stores, or stopped accepting new players to 11 games, with some turning off today. The gaming giant will reallocate resources to more successful titles as well as creating new ones. Along with layoffs, the shutdowns are part of the hard road to recovery for Zynga.

The San Francisco-based company had overextended itself. During its heyday on Facebook it built dozens of games, then aggressively launched mobile games as smartphones gained popularity. It didn’t seem like a problem when the company was preparing for a big IPO.

But Zynga’s share price got decimated over the past year. Investors feared it had become bloated, free virality on Facebook had been curtailed, competitors were proliferating, and the shift of Facebook users to mobile from Zynga’s stronghold on the desktop canvas would break the company. Zynga’s share price is down 3.52 percent to $2.33 from its $10 IPO price a year ago.

To get the company back on track, Zynga announced a deep set of cost-cutting measures, including laying off over 100 employees, closing offices, ceasing to renew deals with contractors, shutting down 13 titles, and significantly reducing investment in The Sims-style game The Ville.

Now the hammer has dropped on eleven of these games. Keeping them alive spread engineers, designers, and product teams too thin and cost money Zynga can’t afford anymore. Those that weren’t shut down or pulled from the app store already no longer accept new sign ups and will stop altogether next month. Here’s the full list:

PetVille – Shut down December 30th
Mafia Wars 2 - Shut down December 30th
FishVille – Shut down December 5th
Vampire Wars – Shut down December 5th
Treasure Isle – Shut down December 5th
Indiana Jones Adventure World – Closed to new players, shuts down January 14th
Mafia Wars Shakedown – Pulled from app stores
Forestville – Pulled from app stores
Montopia – Shut down December 21st
Mojitomo – Pulled from app stores
Word Scramble Challenge – Pulled from app stores

These shutdowns might not seem like a big deal to everyone, but they were near cataclysmic for some players who pumped countless hours and dollars into these games. If you’d spent years tending your virtual aquarium only to have it disappear, you can imagine how disappointed or angry you’d be. Comments from gamers on the shutdown notices included things like “my daughter is heartbroken” and “Please don’t remove petville. I been playing for 4 yrs. and I’M going to miss my pet Jaime….why do you want cause depression for me and others. Why do you want to kill my pet?”

To numb the pain and try to get gamers hooked on titles that will keep running, Zynga offered people who played FishVille, Adventure World, and some other titles a free bonus package of virtual goods in one of its flagship games CastleVille, ChefVille, FarmVille 2, Mafia Wars, or YoVille.

Though it may seem like a mass culling, Zynga will still have over 30 titles available across Facebook, Zynga.com, iOS, Android, Myspace, and other social sites.

The fact is that if Zynga wants to save these games, keep the rest of its workforce employed, and get its share price growing, it had to cut deadweight. While dead pooling 11 games was surely tough, it’s better than Pincus freezing up as the ship sinks. The teams from these games could help Zynga produce and publish more titles like Horn, a mobile adventure Zynga co-released with Phosphor that Appolicious named the best mobile game of 2012.

Sometimes you have to put old dogs to sleep.

–

For more on Zynga’s decline and attempt at recovery, read:

Why Zynga Failed

Zynga Just Shut Down Boston Office, Laid Off 100+ Employees From The Ville And Bingo Teams In Austin

[Image Credit]

Social gaming giant Zynga has now confirmed that it will be closing down its Japan operation, as it continues to consolidate its operations and cut less profitable parts of its business. The spectre of pulling out of that market was first raised in October when the company laid off 5% of its employees. Today, the CEO of the Japan operation, Kenji Matsubara, posted the news confirming the closure, (ironically) on Facebook, the social network that has been so closely tied to Zynga’s rise and fall.

No direct reason for the closure is given but it is likely linked to poor sales for its games in Japan.

The news was first spotted by Serkan Toto, who posted a screenshot of the status update from the CEO:

He notes that the Japanese text reads as follows: “Zynga Japan will be shut down at the end of January, that Matsubara thanks users for playing his company’s games, and that service for popular card battle game Ayakashi will be continued.”

The site also bears a similar message, with an indirect hint that while a few games have proven popular and will continue to be supported, others have not:

In translation (very, very roughly, using Google Translate), that reads:

“Notice of dissolution of a Japanese corporation
Thank you for patronizing always Zynga Japan. that we will continue to work but I get the kindness of everybody over two and a half years since its establishment as the Japanese subsidiary of U.S. company Zynga, to dissolve the corporation Womochimashite Japan January 31, 2013 due to various reasons became.
I would like to thank deeply from my heart to everyone, including the customer who enjoys the title of our past, we received your support.
Because we will continue to service beyond January 31, 2013 “Yin Ayakashi record” has gotten (and Android version of iOS) well received, thank you for your continued patronage and support.”

Zynga has a strong history with Japan. Before it went public, one of its biggest backers was Softbank, which pumped $150 million into the operation in 2010. Zynga itself expanded inorganically into that market, buying Unoh in the same year, reportedly for several billion yen.

But the writing has been on the wall for a while: not only is Zynga seeing declines in revenues and players for its games against competition from GREE, DNA and others, but it had already noted that it was considering a closure in October. Last month, it started the ball rolling by closing down three games in the market.

One question now is what might happen in the UK — another market that was mentioned during the October layoffs. The company has already shut down its games studio in the country, and the UK general manager departed last month. But on the other hand the UK has played a big role in the company’s latest strategic push to revive profits: a move into real-money gambling, which it is doing in partnership with bwin.

You’re a poker shark. Your friends aren’t. If you play with them you’ll just crush them and it won’t be any fun. That’s why Zynga’s SVP of mobile Travis Boatman seems unfazed by the end of the game giant’s exclusivity deals with Facebook. During a fireside chat today at the Mobile-Loco Conference in San Francisco, he said “There’s a lot of people who play games and want to connect socially who don’t want to use Facebook.”

Boatman characterized Facebook as a critical stepping stone in Zynga’s early days, but with time it needed the social network less and less. Fireside chat moderator AJ Glasser of Inside Social Games asked Boatman about the companies’ relationship, and he replied “We’re super fans of Facebook. They were a great partner of ours in founding and growing the company.” But earlier this month, Zynga and Facebook prematurely ended a partnership agreement that guaranteed games would launch on Facebook before Zynga.com. More broadly, it shows the two companies don’t need each other as much as they used to, and will be less likely to give each other special treatment.

The bulk of Zynga’s business is built on Facebook, and it rises or falls depending on the level of viral distribution it gets in the news feed. That means that being less buddy-buddy with the social network could hurt the growth of its games in the future.

However, “on the flip side,” Boatman says there are plenty of times when you want to play with humans that you don’t necessarily hang out with and Zynga wants to make those moments happen. For example, he explained that if “You really like to play poker and like to play aggressively, maybe you don’t have any friends who play like that. The relationship with us and Facebook is great but it provides users a lot more value to be able to connect to people who they aren’t friends with on Facebook.”

Perhaps a way to connect and play with your Twitter friends or an email list will find its way to more Zynga games soon.

One more interesting tidbit: Boatman admitted that if it wants to turn real-money gambling into a core part of its business, it will need to rely on casual gambling games. “Poker may be too aggressive,” Boatman said, which means it could emphasize games like Zynga Bingo, Go Slots, and Sports Casino, and build or buy other gambling games that don’t require tons of skill or experience. That could keep it more of a gaming company rather than a hardcore gambling company.

[Image Credit: Katherine Gray / Saturday Evening Post]

Zynga has applied for a “preliminary finding of suitability” from the Nevada Gaming Control Board, which is the first step towards offering real-money gambling games in that state.

The news broke in the Wall Street Journal, and Zynga has confirmed it, though it notes that the process will take 12 to 18 months, and says that it sees gambling in the “broader U.S. market” as “further out on the horizon based on legislative developments.” The company also repeated that it plans to launch its first effort in real-money gambling (a partnership in the United Kingdom with bwin.party) during the first half of 2013.

Here’s the full statement from Chief Revenue Officer Barry Cottle:

Zynga has filed its Application for a Preliminary Finding of Suitability from the Nevada Gaming Control Board. This filing continues our strategic effort to enter regulated RMG markets in a prudent way. We anticipate that the process will take approximately 12 to 18 months to complete.  As we’ve said previously, the broader U.S. market is an opportunity that’s further out on the horizon based on legislative developments, but we are preparing for a regulated market. We’ve also recently partnered with bwin.party to bring the highest quality real money gaming experiences to our UK players in the first half of 2013.

Over the past few months, as Zynga finances have disappointed, CEO Mark Pincus has been pointing to real-money gambling as one of the main opportunities for Zynga’s future growth.

Update: I just got off the phone with gaming attorney and former regulator Mark Clayton, who gave me more of the legal context. He said that historically, in Nevada, “if you wanted to get licensed for a gaming project, you had to have a deal in hand” — such as the rights to purchase a casino.

On the other hand, securing a deal can be challenging when you’re facing “regulatory uncertainty.” So Nevada introduced this concept of a preliminary finding of suitability, which allows a company to clear some of the regulatory hurdles before they make an actual deal. Basically, it’s an acknowledgment from the gaming board that it’s okay with that company doing business in Nevada.

In other words, this is indeed the first step for Zynga to apply for a gambling license, and eventually to offer real-money gaming in Nevada. Clayton also noted that in order to offer online poker, you have to either be a resort casino, or be an Internet gaming company that partners with a casino. He didn’t talk about Zynga specifically, but it sounds like a casino partnership is a likely course of action.

Editor’s note: Tadhg Kelly is a game designer with 20 years experience. He is the creator of leading game design blog What Games Are, and consults for many companies on game design and development. You can follow him on Twitter here.

For retailers and publishers in video games, Christmas is the busiest time of the year. All the big releases stack up through October and November, and are judged by consumers to be worthy or otherwise. On the digital side, Christmas is often one of the slower periods but, when the dust settles and spring begins, often new heroes emerge. Either way, the holidays mark the end of a cycle, and then we begin to wonder what’s next. Assuming the world doesn’t end on December 21st, what’s going on for games in 2013?

The games industry has become an awfully complicated place. In part this is due to new platforms, free-to-play business models and apps. At the same time the market has changed, with crowdfunding giving voice to tribes of fans. And yet old-school developers continue to make mistakes and shutter their doors (sometimes spectacularly). There has been an explosion in the “gamelike” industry, in areas such as gamification, educational and health gaming, but all are now showing signs of weakness. And, like a Balrog rising from the deep, the console industry is stirring once more and its fires cannot be ignored. The year 2013 is shaping up to be a year of disruptions and transitions.

Consoleapalooza

Nintendo recently launched the Wii U, and effectively fired the opening shot of the 2013 console race. The launch itself seems to have gone passably well, though not as well as the Wii. It seems that Nintendo has a tough time explaining what Wii U is and why you should get one, and there are also issues, such as battery life, its social-networking setup and the way that data transfers from Wii and storage are handled. And the initial game lineup is pretty quiet. Nonetheless, Nintendo says that it has already sold 400,000 machines, and some launch games – such as Zombie U and Nintendoland – are receiving good reviews.

Nintendo’s hope is to recapture the market once more by playing the same card it always does – a new kind of control – and will probably have some success in doing so. This time, however, rather than aiming solely for the mom and pop players, Nintendo is trying to encourage gamers back to its system. There it is running into trouble, as many of those fans felt somewhat left behind by the Wii, and they also suspect that Wii U is underpowered as gaming machines go.

Microsoft is also expected to unveil the next Xbox in 2013. Xbox 360 is generally considered to be ancient these days, and also somewhat crufty with video, music, social networking, Kinect and so on. Its digital strategy is also outdated, more publisher and less App Store, despite once being a leader in that area. Beyond that, Microsoft also has a big challenge in finding a new Xbox marketing story. It’s become very difficult to tell what Xbox really means any more (and in console, where players are very tribal, that’s a big deal). So their challenge is to find a new sense of inspiration, which is no small feat.

This is also true for Sony, expected to announce a new PlayStation in 2013. While Sony has been trying hard to recapture gamers (with games like Journey), it has a big problem convincing the world to buy PS Vitas. The company as a whole is still losing money, although at a slower rate than before but, like Microsoft, its complex ambitions have resulted in a mixed bag of projects that sit uncomfortably next to one another.

The opportunity for either company is to be the console that gets back to being about games. While players love Netflix and other video on console, they generally don’t care about meta-stuff like social networking. Many of them want their machine to be about games first, and many developers want to be able to access the player market. The question is whether either company is able to see past its own over-wrought ambitions and make that big bet, and also which of them is able to get out of the way of developers and curate, rather than manage, their digital offering.

There’s one more story that could help light that way. Sure, maybe Apple will open up the Apple TV to apps or Samsung will throw its hat into the ring, but I’m talking about Ouya. Designed specifically for indie developers and distributing only through digital, the Ouya project raised $8.6 million on Kickstarter in 2012. It demonstrated that there is a market for indie consoles and that that market is genuinely passionate. This is a quality that has been lacking in the console space for some time, a story totally different from the big-corporate consoles. So it has the nimbleness to maybe make an impact. If it manages to own content of the sort that console makers cannot easily allow themselves to publish, then it could become the punk label to which all the cool kids gravitate.

And that might be the biggest disruption of them all.

Wherefore PC?

While we live in a post-PC age, the PC is trying hard to adapt. Sales might be down, but the PC is still probably the most ubiquitous gaming device in the world after mobile. It is host not just to retail or indie games, but also (via browsers) social and open web games, World of Warcraft and other MMOs. So there’s a lot to play for.

In particular I think it’s a great time to be looking at Windows 8 as the next stage for social and casual PC gaming. Microsoft has already sold 40 million licenses of Windows 8 and each of those has a Store attached, which adds up to a lot of eyeballs. What will be really interesting is if Windows 8 developers apply the learning of browser-based gaming.

The browser has hit something of a roadblock in terms of performance, with Flash dying, Unity not quite there (in browser) and HTML5 struggling to make an impact. But if there’s one lesson that Apple has taught it’s that users actually prefer apps. They’re faster, easier to find and generally a superior experience because they don’t have that browser layer attached. Windows 8 enables free-to-play games to the desktop, much as iPad enabled CSR Racing. That by itself is a really big deal.

Now that Microsoft has closed the loop of payment solutions, and that, combined with desktop-level visibility, makes for a potent formula for the PC. Furthermore notifications from games can go to the desktop, which is a massive value-add for developers. These are all very good things.

I also think 2013 will be difficult for Steam. Steam is overwhelmed by its catalogue and not included as a part of the default Windows 8 dashboard. Its audience may stay fixed, or even decline, depending on the impact of the Windows Store. Steam is – and will always be – great value for the kind of indie PC gamer who loves his games, but it may have reached its zenith. What would be interesting is if Steam got involved in crowdfunding. It has the passionate audience and the payment solution, but so far Valve seems nervous about going all the way.

SoLoMoVille

Then there’s social, tablet, mobile, location, augmented reality and so forth. While it’s increasingly clear that this space is all about being on tablet first, the days of it only being about iPad are drawing to a close. Androids tablets and their Kindle cousins are finally starting to make inroads, both in terms of distribution and getting better at monetisation. And Microsoft may eventually crack the Surface question.

The larger question facing social games is what their second generation looks like. Zynga remains troubled, now no longer in a special relationship with Facebook, and overly heavy. On iPad, newer developers like Supercell and Natural Motion have adopted the Zynga formula and are doing well, but that formula has a half life, which induces user fatigue pretty quickly. Once the platform amnesia phase passes, tablet/social could well become a sticky place in 2013.

Hopefully 2013 will mark a year of greater experimentation away from the roleplaying-game format that marked most G1 social games. Studios like 22cans are messing with ideas like Curiosity, a game in which players chip away at a giant cube. There are also lessons to be learned from Minecraft and collaborative creativity. On the more focused side, something very interesting is happening in social tournament games, which is quite a different kind of multiplayer from the turn-based games like Words With Friends that marked 2012. (Disclosure: I’m going to be involved in this social tournament area next year.)

There’s also the draw of cash gaming. Zynga is widely expected to move into real-money gambling next year to generate revenue in gambling-friendly countries like the UK. Gambling is a very different beast to social and has many expert companies already within it. It’s also a very difficult space within which to differentiate on content, because every provider’s games are largely the same. Lastly, gambling is much more heavily regulated than other games, which brings many associated costs. We’ll see, but I personally think Zynga will struggle in this space.

Finally there’s something interesting in the intersection of location and augmented reality. Location games have proved a bit of a dud because they’re very thin. A couple of years ago location was considered hot (remember Gowalla and SCVNGR?) but these days checking-in has become just another function. Foursquare is still the only name in location, and its gaming applications have largely stalled.

However I think there’s something to the idea of “local” gaming, where players gather together in real-world spaces with their digital equipment to play games. There’s something in the area of digital glasses, tablets and colocation that could prove very interesting. Imagine sitting down at a table and playing an enhanced board game, like holo-Chess in Star Wars perhaps, or a version of Magic: The Gathering where the spells are enhanced by image recognition to play animations. Next year might be too early, but it’s coming.

Gamelikes

2013 is likely to be a tough year for the “gamelike” industries (such as gamification, transmedia, etc). My recent gamification post seemed to hit a nerve with many and I’ve received several emails from people who are tired of high-concept theory, and instead want simple actionable plans. A lot of questioning of the efficacy of gamification has emerged, and that kind of talk usually precedes a downturn. My anecdotal experience leads me to think that gamification’s hype days are almost done, and so the movement will likely enter a period of introspection.

Similarly, transmedia projects remain stuck in that high-concept space. Transmedia might be a big talking point at conferences, but so far little has really come of it. Like the virtual world buzz of five years ago, there’s only so long that you can continue with high concepts before numbers surface that show that the trend is more fiction than fact. And that’s the point where investors, brands and so on start to cool on the whole area. I would not be surprised if this happened to transmedia in 2013, as it feels due.

I also expect something similar to happen with exercise, education, health and several other gamelikes as their novelty wears off. There will likely be some consolidation in specific markets, such as diet and exercise trackers, while others will fade entirely. Perhaps this will lead to a new round of gamelike hype around a new technology like augmented reality. A year from now we may have conferences springing up to tell us how the future will be like an overlay on reality, and we can all get excited by the prospecting of game/life crossovers.

Maybe, but we’re probably not quite there yet.

Conclusion

A year of consolidations and retrenchments for some, of attempting to transition for others. However, also a year of potential disruptions. Perhaps the most interesting thing about the games industry, and why it feels fragmented these days, is that sense of permanent disruption. Can console makers really continue as they have for years, releasing updates only every once in a while and dealing exclusively with preferred developers? Will tablets eventually supplant consoles entirely, with their much cheaper (and improving in quality) games and business models? Can gamelikes find a new story to tell, or are they going to get stuck in this phase of questionable value for a long period?

These and many more are the continuing questions that we should all be asking.

You might think Zynga’s newfound flexibility from the end of its exclusivity agreements with Facebook would encourage investors. Instead, $ZNGA is down 12.21 percent after-hours, likely because it’s lost its special relationship with the social network. Now it can launch games elsewhere and use non-Facebook payments and ads on Zynga.com, but it might stop getting valuable preferred treatment.

As of 4:30 pm PST Zynga’s share price is down $0.32 or 12.21 percent to $2.30 in after-hours trading, while $FB is holding steady (down just 0.07 percent). That’s after a good day of regular trading for the two that brought Zynga up 4.68 percent to $2.62 and Facebook up  3.64 percent to $27.32. The after-hours fall could stunt two weeks of recovery that saw Zynga making a comeback from a low of $2.10 in early November.

So why is this renegotiation problematic for the gaming giant? Zynga built and bought its way into a buddy-buddy relationship with Facebook in the early days of the platform. Zynga was building games that drew tons of time-on-site and return visits to Facebook. Meanwhile, it was spending a boatload on ads because a high viral coefficient meant that when it bought one new user, it scored several of their friends for free.

Because it was driving so much of Facebook’s revenue, Zynga was in a good place to negotiate. By the start 2011 it would contribute a full 19 percent of Facebook’s revenue. But back in 2009 and 2010, Zynga was aggressively pushing to pay less than the standard 30 percent tax on Facebook Credits. However, there was no proof that that deal ever went through.

Instead the two publicly announced a deal in May 2010 to have Zynga exclusively use Facebook Credits for five years at presumably the normal tax rate. Eventually they would also have deals to use Facebook’s ad units and virtual currency payments system Credits on Zynga.com and exclusively launch games on Facebook. The two companies were cosy together.

This year has been a different story as Zynga has hit tough times. By October, Zynga had only accounted for 7 percent of Facebook’s total revenue, down from 12 percent a year before. Its share price cratered, many executives left, and its standalone website hasn’t been a hit. Its special relationship with Facebook offered some hope, though. The potential for early access to beta marketing products and APIs, and Facebook testing its first foray into an offsite ad network on Zynga.com could give it an advantage over other developers.

That leg-up was partly lopped off today. You can read Anthony Ha’s analysis of the amendment to their partnership agreement that the two companies just filed. Sure, Zynga.com could get a lower tax rate by using another payment system or be paid more by hosting ads for someone else. And it could exclusively launch games on other social networks. But Facebook is the lynchpin of Zynga’s business. Preferred treatment there could easily be worth more than all these other opportunities combined.

That’s how Wall Street seems to be interpreting it, at least. Zynga’s statement said it wanted to renegotiate the terms in a quest for flexibility. That could just be spin, though. Facebook may have wanted to un-anchor itself from a sinking ship and appear more fair to the rest of its developer ecosystem.

That might also be why my sources say Facebook didn’t want the clause in the amendment that notes it is now allowed to build its own games. I hear it has no plans to build games, and it damn well better not unless it really wants to piss off its other developers and cause a mass mutiny or exodus.

[Image Credit: 8th Circuit]

Yesterday, I spent some time with the folks who bring games to life on Facebook. Love ‘em or hate ‘em, there are a lot of people who like to hang out on the social network and play turn-based games. Sure, it can get annoying, with all of the notifications and requests, but Facebook is apparently trying to do something more than annoy you. Actually, it’s quite the opposite.

Recently, Facebook CEO Mark Zuckerberg said that games weren’t doing as well as he’d like on the platform, but all hands are on deck to change that.

What Facebook thinks is that everyone is a “gamer” given the right people are involved with the right game. Be it a word game or an in-depth one like Zynga’s Ville’s that make me want to kick someone’s pig, The idea of turning everyone into a gamer isn’t new, Nintendo has been doing this for years and years. In fact, my Mom and Stepdad are pretty darn good at Wii Bowling. Really good, actually. More than 251M people are playing games on Facebook each month, which is a 10% growth since last year. Currently there are 130 games with more than 1M monthly active players each. Take that, consoles.

During a game developer’s meetup in its headquarters in Menlo Park, Facebook discussed some of the latest and greatest stats and trends that will help incentivize and excite folks to crank out new types of games, in different genres, to get Facebook’s social juice. It was quite an impressive turnout, and after the talks, I got to sit down with a few very key members of the Games team.

Going into Facebook, I let them know that I’m not a gamer. I don’t really have the time or the attention span to play FarmVille. In fact, I find it quite annoying. Knowing that, a lot of the questions that I asked had to do with how Facebook can turn people who don’t consider themselves into gamers as people who casually play a social game now and then.

Clearly, this is something Facebook is working very hard on.

Sean Ryan, Director of Games Partnerships at Facebook, used to work at Sega, News Corp Games and started a few small companies focusing on virtual world categories of games. The man has done this his whole career, and we talked about how Facebook is adopting that legacy approach to games as well as starting over with its own new fresh approach.

We play a lot of games

Yes, the Facebook Games team is definitely ingrained in the gaming culture, playing tons of games in many different genres. The team is distributed, Ryan tells me, holding these sessions with developers in Moscow, Tel Aviv, Singapore and Dublin. They get around.

How do you get a gig working with Facebook Games? Simple, Ryan explains:

The key thing is do you love to play games? The metric we follow is that people play 10 different games each week to see what’s new and hot. Different people are matched up with genres based on their interests. It’s fun but they’re not always good games, they “different” games. We’re not here to tell developers how to build the games, but we help them with how to fit in the social layers and put in monetization. Also to get feedback on how we can improve our platform.

Facebook has shifted from being a wild west for games to a more structured source for things that might interest you. One big way was with the App Center, a place where people can go to browse games, read reviews and find out which ones their friends are playing. For me, those are the only games I end up trying…the ones they vouch for, and don’t obsessively play. I asked Ryan about the App Center, and Facebook’s reasoning for it:

App center came from our core game developers. Our users don’t like to share as much in their feed, so we thought about how can people help developers’ games get found? Strategy games and hardcore games fit a very small niche, people that know what they’re looking for, but we needed to help them on how discover them better. App Center has high quality referrals, basic block and tackle stuff. We want to enable all types of games.

All types of games, he mentions. That means that Zynga shouldn’t own the social network gaming penetration like it has for the past few years. I personally find all of Zynga’s games to be annoying and similar to that of a shady casino. The company isn’t shy about trying to hook you for life until all you do is water your virtual flowers. But there are other games. The games that excite me are ones I can collaboratively tinker around with when I have a few moments, within groups of my friends.

That’s why Facebook recently announced a new feature for developers to integrate into games, the ability to set up and maintain Facebook Groups for all different sorts of genres. Ryan explains:

Games with friends are great for groups, raids and such. The classic Warcraft clans have 150 people in them, we look at the platform in that way. The team is spending a lot of time on unity right now, how we can be better ourselves as partners for developers, and make sure that they have a greater integration with all Facebook channels. Thats what we spend a lot of time on as well as playing a lot of games

How to keep away from App Center gaming

Gaming an app store is nothing new, just ask Apple. The company has had to deal with people literally building companies that focus on helping apps drive up the charts “artificially” through incentivized download programs for consumers. It’s annoying and it’s something that Apple needs to fix.

The way around making the experience better for Facebook users is providing and surfacing real, awesome context around why they might like a certain game:

We do our best with putting social context on everything that we do. We have the rating system that is something that’s not easily gamed. Great indie games and great big games are finding an audience. As long as you speak authentically with the audience, things will work out. Engagement is essential.

Working side-by-side with game developers

The way to get game developers to adopt new features is to keep them in the loop at all times and not drop new things in their lap with minimal instructions or obnoxiously long documentation. Facebook tries to avoid this by keeping in contact with developers all of the time. In fact, the entire team makes itself available whenever they’re around to answer a question.

The Product Manager of Games at Facebook, Gareth Davis, gave me a bit of insight on how he works with those developers, having been one himself since an early age, then going on to EA, and developing titles for Sega. He shared:

I’ve worked in games for most of my career, the only time I wasn’t when I was in movies. I started out as a game developer, taught myself how to code when I was a kid, and then developed a game as a teenager. It was a game called “Suspicious Cargo: Out of luck in outer space.” Gremlin published it in Europe. I got hooked on the industry, relocated to Silicon Valley, where games grew up and worked for a bunch of companies here, and I even worked with the guy who built Tetris. Pretty much every Summer I had as a kid was lost in a game. I played Tetris on a Gameboy all day every day.

Davis has been at Facebook for 4 1/2 years, and for a while he was the “Games team.” He truly wants developers to be able to take their time and make something fun, with small or large teams involved, and then find a way to make money from it so that they can do it again. Only a game developer could think in that way, and that’s Davis.

Facebook changes the gaming industry by injecting social functionality into it, and Davis was there from day 1:

In ’08/’09 a new industry was created, people were really excited about it. We had a ton of new games. It became a big industry and ecosystem with millions of players, and it was an incredible experience. Having been in the shoes of the game developers, staying up late and putting your heart and soul into a creative a product, to empathize with game developers, bringing games to the masses like this is a dream come true.

It’s not just Davis anymore, as he told me that Facebook has a “small team with large impact” all over the world working with all teams at the company, as well as those game developers that work so hard. His primary focus is to see what’s working for games, gather feedback and then continually iterate on the platform to make sure that everyone gets to see the same success:

We work very very fast and ship things every week and in some cases every day. Because we’re a web service we can iterate quickly using the feedback from our partners. In terms of adoption, every developer will look at the feature-set out there, some make sense for some games and some don’t. If you have a game with clans and alliances it’s a no-brainer to integrate groups. These groups are being created already, but how do we link it into the game and drive people to the game? That’s why we built it.

How can Facebook keep moving so quickly without losing the attention and adoption from its more than one billion users? Davis says that the majority of the users, especially ones that play games, are used to the change and that he feels like Facebook does a good job of making it a really great experience and not a pain when something new pops up:

Everything is a living-breathing product that we’re iterating on, and a ton of discovery on Facebook comes through people. We’ve had all of these channels in the system since day one, that’s why we can get audiences of tens of millions playing a game. App Center, for example, is just an additional way to do that. If you’re looking for a game to play, this is a place to go where you can discover them.

But how can the entire world be gamers if they’re not?

As I stated, I’m not a gamer. I don’t consider myself who can even say that playing games is a hobby. But I will admit that spending a few minutes, or hours, sometimes on a new game is rewarding and fun. Sure, I work really hard and I’m an edge case, but I know a lot of other people in the same boat.

Davis suggests:

The big thing that Facebook introduced to the world is that everybody likes to play games but most people don’t consider themselves a gamer. The beauty of many Facebook games, you ask them if they’re playing a game, and they say no I’m just hanging out and talking and having fun. A lot of games on Facebook have made that experience prominent.

Hanging out and having fun. On Facebook. Sounds like something that a lot of people do. Are you playing a game while you’re hanging out? You might be, but you might not consider yourself a gamer. That’s ok. We all like to have fun. Will i start playing a ton of games? Probably not, but I might hang out in a group chat while others do. And who knows, maybe I’ll stop being so shy and go play with them.

[Photo credit: Flickr]