Zynga, a games network which operates a series of social casual games, has raised $29m in a Series B round, led by Kleiner Perkins Caufield & Byers, bringing its total funding to $39m. It has also announced the acquisition of YoVille, a virtual world Facebook application. Zynga is already making its games available as applications on Facebook and other social networks, with 2.9 million daily active users across their different offerings, including Texas Hold’em and Scramble (a word game). It had been believed that Kleiner Perkins were no longer investing in Web 2.0, according to a recent Fortune article, but Partner John Doerr made an exception for Zynga saying that they have ‘cracked the code’ in developing viral games.
The reason that Zynga has attracted such enthusiasm from investors is the appeal of its model. It is able to create games on the cheap which nevertheless appeal to huge audiences. By creating a portfolio of games, and using social networking sites and cross-promotion to build up a user base, they start to be in a position to be very profitable. They are also freed from the tortuously long development cycles of large, traditional games companies such as EA (whose former Chief Creative Officer Bing Gordon is also joining Zynga’s board today).
However, this new model absolutely relies upon the social aspect to games, and it is likely that a desire to strengthen this is the motivation behind the purchase of YoVille. A virtual world built on top of Facebook is not a unique concept – Vivaty is another example – and there is a reason for that; the social network offers a boost to viral growth, and the combination of an appealing virtual world with the Facebook platform is a recipe for lots of users.