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In 2011, Zynga was the leading competitor in the social gaming industry, holding 39.1 percent of the market share.  This is approximately $544 million in revenues for that year.  The second and third place competitors, EA Playfish and Disney Playdom, managed to have 6.5 percent and 5.5 percent of the market shares.  This gave Zynga an almost 33 percent advantage over its nearest competitor.  PC Magazine wrote that Zynga’s market share could be attributed to its ability to purchase gaming studios or development teams and get working on the next new game (Hachman, 2011).  This lead in market share can also be credited through Zynga’s partnership with Facebook and adjusting to Facebook’s changing user notification policies as well as improvement on targeting existing customers that could potentially provide more value over time (IHS, 2011).
Zynga’s dominant market share gives it the ability to accumulate six times the revenue of its nearest competitor, EA Playfish.  Zynga’s partnership with Facebook allows it to have access to millions of Facebook users worldwide.  With such large revenues, Zynga can afford to buy out other companies, expand its product line, and improve on existing features.
Partnerships
Facebook, who allowed Zynga access to its platform in 2007, entered a strategic partnership with Zynga for five years in 2010 (Rao, 2010).  By the time of the agreement in 2010, millions of users on Facebook were already playing Zynga’s games.  This partnership gave Zynga more access to Facebook Credits, which is Facebook’s virtual currency, of which Facebook gets 30 percent of revenues created by Zynga’s games (Rao, 2010).  The agreement between the two was restructured in 2012 loosening some of the bonds.  Originally, all players of Zynga’s games on Zynga.com had to log in through Facebook, and Facebook received 30 percent of the revenue created on Zynga.com (Pepitone, 2012).  The new agreement gives Zynga the freedom of not using Facebook for players to log in to games on Zynga.com and Zynga does not have to use Facebook ads or Facebook Credits on its own website (Pepitone, 2012).
Zynga continued to make strong partnerships in 2011 with TenCent, a Chinese internet company, and in 2012 with Bwin.party, an online gambling company.  With these strategic partnerships, Zynga was able to expand internationally.  Bwin.party offers online gambling and poker to the United Kingdom, while TenCent gives Zynga a presence in China. This also makes it possible for TenCent to expand into North America, making this a promising partnership on both sides.
In 2014, Zynga announced partnerships with Tiger Woods and with the National Football League, which are multiyear deals and will provide several golfing and football games on mobile devices (Molina, 2014).  These partnerships are just a few examples of agreements that Zynga has with other companies.  These agreements and partnerships give Zynga the ability to access other areas of gaming and to enter new markets both domestically and internationally.

Financial Base
Zynga’s revenues in 2010 were $597 million (Pepitone, 2011) and $1.14 billion in 2011 (Whitehorn, 2012).  Zynga’s initial public offering (IPO) in December 2011 raised $1 billion for the company (Pepitone, 2011).  In 2012, the company had revenues of $1.2 billion (Farokhmanesh, 2013), in 2013 revenues of $873 million (GlobeNewswire, 2014), and 2014 revenues of $690 million (Zynga, 2015).  Although revenues have declined since 2012, Zynga has a large financial base to work with.  Zynga has used its initial surge in revenues to acquire companies and development teams and to lure talent away from competitors.  This downturn in revenues can be viewed as a negative for the long term, but could also be viewed as a short-term decline as the company makes moves into the mobile gaming industry.

Talent Base
When Zynga filed for its IPO in 2011, it listed its talent base as one of its strengths, having 2,268 employees (Orland, 2011).  With its acquisitions of new companies, development teams, and employees from competitors, Zynga has a large knowledge base to work with.  In 2014, Zynga acquired NaturalMotion, a mobile gaming developer, for $527 million (USA Today, 2014).  With its wealth of acquisitions and personnel, Zynga has the knowledge base to keep moving forward and maintain its momentum as a key player in the gaming industry.
Weaknesses
Dependence on Facebook
Zynga’s growth over the last four to six years is largely attributable to its integration with Facebook; and its continued dependence on the platform gives Facebook some leverage over Zynga in future negotiations.  Players accessing its games through Facebook generate a substantial portion of Zynga’s revenue (Duryee, 2012).  Zynga accounts for approximately 12 percent of Facebook’s revenue that totaled 3.7 billion.  This consists of both advertising and virtual goods sold from within social games.  Facebook is where Zynga attracts most of its user base, and Zynga is Facebook’s largest partner.
The big turning point occurred in May 2010 when Zynga agreed to use Facebook credits as its primary payment method inside the games.  As part of that, Facebook would collect 30 percent on each purchase.  That contract will expire in May 2015 (Duryee, 2012).  This contract ending could be harmful to Zynga’s bottom line if they do not find other avenues of success in other areas.
Platform
Charles Hudson, a partner with SoftTech VC who previously founded a company acquired by Zynga says, “People on Facebook return day after day, but users are not as strongly inclined to open an app” (Leber, 2012).  Social games need to become more creative before they will work on mobile devices.  Games cannot afford to get boring or people will stop playing them.
There are major challenges for companies hoping to make games more than fly-by night hit on mobile devices.  Some game developers call this platform amnesia.  This applies to people that get excited about the same old game on new technologies.  Mobile game companies struggle to gain and keep users, especially the ones willing to spend money.  This happened to Zynga when it acquired OMGpop, the company was behind the hit game Draw Something.  After purchasing OMGpop for $180 million, the game that had become so popular quickly faded, causing a loss for the company.
Currently Zynga’s games are failing to meet the high expectations set by previous hits.  This leaves people thinking that social games are a fading fad.  As the company is expanding, audiences are growing more demanding for bigger and more complex games.  The problem is their users and revenues are not increasing with it and they are facing steeper competition (Their, 2012).

Company Culture
The culture of Zynga could become a serious liability.  The discord in the company is increasing and this may jeopardize the company’s ability to retain top talent.  This comes at a time when Silicon Valley is looking for the best executives and engineers.
Zynga needs to do more to bolster its image.  If it does not do this, they risk losing their appeal as an employer.  Recruits may turn to younger start-ups with more potential.  Companies have learned that when you treat employees as a commodity the consequences are severe and often times it becomes impossible to achieve a similar success.
Disgruntled Employees
Job cuts were issued across all parts of the company, and Zynga closed down a few office locations.  Layoffs of 520 employees, or 18 percent of its workforce, were part of an effort to stabilize finances at the struggling video game company.  Social gaming has become so popular that it is difficult to maintain a leadership position (Pepitone, 2013).
One employee, before his departure from Zynga, is said to have copied over 760 files into a folder on his computer.  The employee later transferred it into a folder on his personal dropbox cloud storage account.  The data included, among other things, more than ten unreleased game design documents, information on the proprietary methods Zynga uses to identify which games and game mechanics will be successful, and an internal assessment of the relative success of new game features introduced over the last quarter by CityVille (Ribeiro, 2013).

Customer service
Based on their customer service experience customers believe that Zynga is all about revenues and everything else is second (Dess, Lumpkin, Eisner, & McNamara, 2014, p. C127). If you interview a CEO, they will tell you how everything is great and they are doing everything they can to provide the best experience for players.  This is the PR-approved shell.
Forbes Magazine talked to an actual player about social games from Zynga.  This was John Sweeney from Treasure Island, Florida, who hosts and owns the Facebook and Zynga Podcast.  He also owns a radio station for players called the Social Network Radio.  Sweeney is a member of the Mafia Wars Players Advisory Committee.
John Sweeny voiced complaints about Zynga and he feels it represents many veteran players dissatisfied with the company.  He feels the support staff does not understand the games and the features.  Customer service has little or no respect for the players, in some cases, they are calling the players liars, and the players quit in response to it.  Zynga fixes very few of the game issues.  Instead, they try to buy the players off with reward points or virtual items to make them happy (Tassi, 2011).
Opportunities
Educational Eco systems
There is a great need and opportunity in education for technology based learning.  This is a departure from Zynga’s focus on the mobile platform, but its success with Farmville should send a message to the firm.  People like interactive games that require more than just point and click.  Zynga did collaborate with venture firms in 2013 to infuse much needed cash for start-ups looking to provide social networking tools for teachers and students and a platform for educational apps.  Mark Pincus said funding the start-ups was a quicker way to make an impact than developing a “Farmville” like game (Lessin, 2013), but this is not enough.  School districts have tight budgets and strict procurement processes, which makes adoption a hard sell.
Rather than rely on Zynga.org (the non-profit arm of the firm), the company could create an education division.  This division could develop and fund games geared toward engaging students in the classroom in the same manner they learn outside the academic environment.  Entire “Eco-systems” based off real-world scenarios and structures could teach kids subjects like biology and land management.  History games and math concepts on the PC, or mobile devices, could be played at home, school, or on the go.  Competitions between classes, students or other schools, are not beyond the scope of Zynga’s social networking abilities.
Education tech is exploding, and it is time Zynga turned its strength for social networking and revenue generation toward the education sector.  Rather than supporting it only through their non-profit unit, Zynga could reduce cost to the education system through “educational” ads, or links to appropriate and approved sites.  The new CEO, Don Mattrick, told shareholders that Zynga wanted to maximize platform growth, “like that of Apple…”(Ha, 2013).  Expanding into the educational system may not be as lucrative as other venues, but taking a greater role in kids and learning could be just the vehicle Zynga needs for its long-term vision, like Apple!
Business to business (B2B)
Zynga may be too far down the rabbit hole to recover its standing as a truly innovative start-up and developers crank up the competitive heat.  Though Zynga continues to hold the majority market share, it should seize the opportunity for which its current competencies are more suited.  Kevin Oke says Zynga should stop making games and transition the company from gaming content creation towards distributing and managing it (Oke, 2013).  He further develops this thought that Zynga’s creative block could be overcome by focusing on its core competencies and what it has done well in the past.  In other words, form partnerships and alliances with true game makers.  This will open B2B opportunities that cater to Zynga’s strength of data intensive analytics.  Rather than acquiring companies in a “Borg-like” assimilation, Oke sees a “Powered by Zynga” model that benefits start-ups and releases Zynga from the creative burden to focus on where it can leverage its experience with analytics and promotions.  Perhaps Mr. Oke’s suggestions that Zynga stop making games is not so strange when one considers the opportunity to develop B2B relationships to help start-ups, does not require Zynga to develop games, and focuses on their analytics and data strength!
Threats
Steep Competition
Aggressive competitors like King Digital Entertainment (KING), Entertainment Arts (EA), Supercell, and Machine Zone have become a threat to Zynga with their new addictive games.  In the past Zynga has been known to take the ideas of other developers and tweak them and make them their own.  Because of the shady dealings of Zynga in the past, many of its industry’s gaming competitors have taken other approaches to grow their business (SEITZ, 2015).  In the month of February Electronic Arts (EA) ranked fourth, privately held Machine Zone came in third, Supercell came in second, and King Digital Entertainment topped everyone in first place.
Many of the innovations that the leading developers have produced have proven to be what the industry wants.  King Digital Entertainment has produced Candy Crush Saga, Candy Crush Soda Saga, and Farm Hero Saga.  Supercell has created Clash of clans, Boom Beach, and Hay Day (SEITZ, 2015).  These games have dominated the gaming world for the last few years.  Companies have turned the heat up on Zynga Inc. and have forced Zynga to fall in the rankings to sixth place.
All of Zynga’s competitors are hoping to push Zynga further down in the rankings in the many months and years to come. Zynga’s past misdealing’s in the industry have caused a new and competitive market that has forced Zynga to look over its shoulder.  Because Zynga has attached itself to Facebook social media arena, it has allowed its competitors to surge by and dominate the market.
Legality Issues
Zynga needs a friend as the Facebook game maker gets ready for a court battle over privacy.  The company behind Facebook’s Farmville, Mafia Wars, and Cafe World was dragged into a class-action lawsuit, alleging that they collected and shared the data of 218 million Facebook user IDs with advertisers and data brokers.  The class-action lawsuit also alleges that Zynga broke federal law and its contract with Facebook by distributing data to third parties (Rosenblatt, 2014).
Another complaint alleges that The Ville, a game released by Zynga, models the graphic style, play apparatuses, and pictography’s of The Sims. This is not much of a surprise in itself – Zynga’s corporate existence has been characterized by accusations of copying social games.  Their biggest money maker, Farmville, has been said to draw inspiration from Slashkey’s FarmTown, and Social apps’ myFarm and various others (Rosenblatt, 2014).  With lawsuits piling up, legal fees will consume revenues.
New Advertisement Arenas
Competitors of Zynga have found new ways to advertise outside of the Facebook social media arena (Johnson, 2013).  Because Zynga had the upper hand with Facebook ads and its many subscribers, other options had to be taken to win the billions of gamers still unspoken for.  Television has always been the number one way to advertise and receive a quick response, and many competitors have used television to draw new gamers.  Facebook has been Zynga’s advertisement platform since its conception in April 2007, and had shut every other company out.
However, with the changing times Facebook was not enough to hold the lead.  As gaming advertisement shifted to other media platforms, and have reached a larger audience, television has boosted competitor sales and customer awareness.  These markets have proven to be highly successful for the young innovative competitors of Zynga (Johnson, 2013).  Once shutout of the advertisement market on Facebook, competitors have joined forces and have moved on to television and other media platforms to advertise their products.
The current state of Zynga’s financial condition requires that changes must be made.  With social media trends changing at a rapid pace, the need to expand outside of their comfort zone may be needed.  In order to keep up with the competition, Zynga has to take steps to ensure a profitable stability for their future or risk financial failure.  Below are three alternatives that could be used to bring Zynga back on top of the industry.