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March 21, 2012

Zynga Gets Ready to Make Draw Something Company its Next Big Meal

By Jack Grauer, TMCnet Contributing Writer

Confirmed reports say Zynga (News - Alert), the frenetically successful social network game developer, intends to buy out design company, Draw Something, the design studio behind the game OMGPOP.



Matt Lynly of Business Insider explains that this latest buyout attempt is par for the course of Zynga's business agenda. When smaller game studios release a product that generates some excitement, and promises more in the future, Zynga will usually buy the game. In this case, they are trying to buy out the whole studio.

If the company refuses to sell, Zynga releases a “fast-follow”. A fast follow is a facsimile of an already successful game, aping the features that make the original one successful.

In the past five weeks, Draw Something got 20 million downloads from the App Store, positioning it within spitting distance to the most popular game released by Zynga: Words With Friends.

The “fast-follow” can be formulated thus:
 

  • Identify the unique strategy or knowledge that a small company like Draw Things employs when they release a successful product like OMGPOP
  • Separate it from the chaff, or the unnecessary “frills” of the product
  • Design a new, similar product that maximizes the profitable elements you discovered by observing the practices of a bush-league operation like Draw Something
  • Release your product on a scale large enough, and at a price low enough, that the smaller company finds itself forced to either get “acquisitioned” or to fold altogether.


Economists Winter and Szulanski explain in a 2001 article, “Replication as Strategy“ that appears in Organizational Science, the “apple pie at Mom's Diner might have broad appeal, but only the locals will tolerate Mom's taste for homey decor.”

The solution is obvious: Get Mom's super-secret apple pie recipe, produce the pie on a mass scale, sell it to more people than Mom ever could, and at a lower rate. Then, you re-approach Mom in six months with an offer she can't refuse.

Lynley is right, but by no means does anything about his argument pertain explicitly to the behavior of Zynga. Why single out one aggressively solipsistic, greedy company in particular among a whole sea of them? 




Edited by Jennifer Russell
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