Zynga Continues To Dominate And Expand Social Gaming As COO Schappert Exits

| About: Zynga (ZNGA)

Zynga's (NASDAQ:ZNGA) second half of 2012 will bring to fruition several recent seminal events. Take a look at how CEO Mark Pincus has positioned his company to expand Zynga's brand.

"Draw Something" Television Game Show Coming This Fall

Ryan Seacrest, CBS, and Zynga will launch "Draw Something" the TV game show. This is an incredible branding opportunity that will drive viewers to play online.

The popular Zynga gaming app is being turned into a television game show, and CBS was victorious in the bidding war for the pilot. The show is a product of Ryan Seacrest Productions, Sony Pictures Television and Embassy Row (the team behind Bravo's "Watch What Happens Live" and "The Glee Project"). On board to executive produce the pilot are Ryan, RSP CEO Adam Sher, and Michael Davies ("Who Wants To Be A Millionaire").

Hasbro (NASDAQ:HAS) Is Creating Zynga Toys And Board Games

There's a good chance this Christmas some of you will purchase a first edition Zynga/Hasbro board game or toy for your children.

Through this agreement, Hasbro has obtained the license to develop and distribute wide ranging product lines based on Zynga's game brands in a number of toy and game categories. This deal also creates an array of opportunities for co-branded merchandise featuring a combination of both Hasbro and Zynga brands.

Tracey Lien, writing for "The Verge" comments on Zynga's licensing agreement:

The results of this deal are a slew of Zynga games coming to retail this fall. Some of the games that are crossing over from digital into the board game world include CityVille Monopoly ($24.99), Hungry Hungry Herd (a cross between FarmVille and Hungry Hungry Hippos, $22.99), Words With Friends ($19.99), and Draw Something (TBA). The games are expected to be available at retail in October and November.

Zynga's Mobile Gaming Strategy

Zynga just released "Gems With Friends" for mobile only on August 9th, and there is a strong pipeline of new games that will be strategically rolled out during Q3 and Q4. Pincus is ramping up Zynga to dominate the mobile gaming space. Zynga's mobile games for iPhone, iPad, Android and Android tablets can be viewed and downloaded here.

Zynga's Latest Facebook (NASDAQ:FB) Game "The Ville" Is Climbing The Charts

"The Ville" has soared to an unbelievable 54.7 million MAU (monthly average users) and is ranked number one according to AppData. AppData ranks "FarmVille" second, and "CityVille" third, all Zynga games. The aggregate of these 3 Zynga games is over 130 million MAU. Once again Zynga demonstrates that it reaches the largest and broadest audience of any social gaming company. Look for more of the same as Zynga continues to expand its footprint.

Although "The Ville" is ranked number one, there is a fly in the ointment. Electronic Arts (NASDAQ:EA) filed a lawsuit against Zynga alleging copyright infringement. Zynga's General Counsel issued this response:

It's unfortunate that EA thought that this was an appropriate response to our game, and clearly demonstrates a lack of understanding of basic copyright principles. It's also ironic that EA brings this suit shortly after launching SimCity Social which bears an uncanny resemblance to Zynga's CityVille game. Nonetheless, we plan to defend our rights to the fullest extent possible and intend to win with players.

Zynga is cooking up something special this week with the release of "ChefVille." Emily Price, a tech writer for Mashable, writes:

Ingredients are key in game play, and each item you learn to cook in the game is made from scratch using the same things you might use if you were making the dish in the real world. Just like you might ask to borrow a cup of sugar from your neighbor in real life, ChefVille encourages you to ask your neighbors for help with ingredients you don't have.

McDonalds (NYSE:MCD) and Zynga Partnership

Zynga and McDonalds joined forces for a one day campaign on "FarmVille" during the latter part of 2010. If Pincus seals a McDonalds' advertising deal on "FarmVille," or gets those scaled down collectible farm animals into a Happy Meal, this would he huge for Zynga's revenue and branding. I would not be surprised to hear that Pincus has partnered with Mickey D's before the end of the year.

Pincus Sets A New Tone For Zynga

CEO Mark Pincus has set the tone for Zynga's management and staff. If you are complacent, lack initiative, unproductive, or fail to successfully perform your responsibilities, you will be replaced. And so it goes, we bid farewell to COO John Schappert, whom experienced a rude awaking when he appeared to be sleeping at the switch.

Pincus's decision to strip Schappert of his responsibilities was not a scapegoat tactic as Zynga's enemies allege, but a necessary action to correct a perceived deficiency. There is no reason to sell Zynga's stock, but every reason to consider buying at these historically low prices. As I explained in a recent article "Zynga: No Games, Just The Facts" the financial facts and metrics are solid. The stock is oversold and a low risk investment.

Schappert's recruitment was based upon his experience at Electronic Arts. Unfortunately, "past performance should not be considered an indicator of future results." There is no guarantee that the passion, commitment and vision success requires will follow an executive to his next position. Sometimes the veteran guy is unable to catch the vision, and consequently, takes down the company -- a memory that would haunt Apple's CEO, Steve Jobs for the remainder of his life.

When Steve Jobs hired former PepsiCo's (NYSE:PEP) VP John Sculley to run Apple (NASDAQ:AAPL), he never imagined Sculley's ineptness would nearly destroy Apple and lead to one of the worst decisions ever made by an executive, firing the founder and gifted visionary, Steve Jobs. Just like Jobs, Pincus concluded he had the wrong man minding the operation. But unlike Jobs, Pincus acted decisively. Suffice it to say, the success of Zynga is paramount to any man's position.

Disclaimer: The information herein is the exclusive opinion of the author and should not be used as a basis for investment decisions. Investors should do their own research before investing.

Disclosure: I am long ZNGA.

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