If social games on Facebook are dying, why is King.com booming?

The recent troubles of Zynga have been well documented. After its IPO stumbled last year, the social gaming company has had a rocky first year as a public company, marked by poor acquisitions, questions about its growth, and a stock price on life support. Just this week, after seeing a steady departure of high-level of executives in recent months, the company announced a new slate of top execs.

All these problems have raised an interesting discussion. Are these problems  specific to Zynga? Or are social games a fad that’s played out?

This is a question that not only cuts to the heart of a new industry that once seemed to be disrupting the traditional gaming industry. It’s also a critical dilemma for Facebook, which depends on Zynga for a big chunk of its revenue and engagement.

This topic came up in September when Mark Zuckerberg appeared on stage at TechCrunch Disrupt.

“Zynga’s had a rough few quarters. They’re basically a strong company,” Zuckerberg said. “Other companies, like King.com and Kixeye, have gained share. We have 200 million people playing games monthly. That’s real.”

King.com? N0t a name familiar to many folks in Silicon Valley, perhaps. At least, not yet. But there’s a good reason Zuckerberg gave the British-based company a shout out. Founded in 2003, King.com is on a tear at the moment.

Riccardo Zacconi, CEO and co-founder of King.com, was recently in San Francisco to host a celebration for the release of the mobile version of its wildly popular Candy Crush Saga. The mobile version of the game was officially launched today in the iTunes store. I got a chance to chat with Zacconi, and learn a bit more about the company.

Also on the hand at the event was Sean Ryan, Facebook’s director of games partnerships, just to provide one more clue as to just how important King.com has become to the social networking company.

“Games are incredibly important to Facebook,” Ryan told me. “We’ve never dedicated more time or resources to games.”

In King.com, Facebook may have found a new partner to help it become a bit less dependent on Zynga. Today, King.com released for the first time some stats about just how fast it’s growing. According to King.com:

  • “Advertising revenue from its social games has increased tenfold in 2012.”
  • King.com is now the second-largest game developer on Facebook,  with over 12 million daily active players.
I asked Zacconi to explain why King.com seemed to be on the rise. It’s actually been on a long journey for the company. After it was launched in 2003, the company gained a strong following for its games on Yahoo. But back in 2009, the company’s growth flattened, and he couldn’t understand why. The reason, as he soon discovered: Facebook.
The company pivoted, and began to focus on Facebook. But rather than spending months developing a single game, the company develops basic versions of numerous games which it makes available on its King.com site for users to try in their experimental phase. The company watches to see which ones take off, and then focuses resources on expanding and developing those.
Zacconi said this rapid prototyping approach has been key helping it quickly find and create the hits that had driven its growth. The company has grown from about 100 employees a year ago to 300.
“The game business is a hit-driven business,” he said. “If someone tells you otherwise, they’re a liar.”
Asked about Zynga, Zacconi said the company succeeded at bringing social games to a mass audience.  But he believes the company over-emphasized “resource management” games (FarmVille and CityVille) that grew old.
“If you think of games, it’s a subset of the world of entertainment,” he said. “If you watch the same movie, over and over, it gets stale. That’s what happened.”
In fact, Zynga has branched out, with hidden object games, and casual arcade games, among others.
Still, Zacconi says King.com has always bet on a wider range of games. And just as important, it develops them from the start to work on both desktop browsers and mobile platforms.
Ryan echoed this point. He said across Facebook, new categories of social games are still seeing big growth, particularly the arcade and casual types of games. “And King.com is one of the leaders in that category,” Ryan said.