CASE STUDY QUESTIONS

1. It has been said that Zynga is an analytics company masquerading as a games

company. Discuss the implications of this statement.

As stated in the case study, Zynga is now the leading developer of social network
games. In order to be the market leader in social gaming and have the ability to
provide critical data of its customers in the social network, Zynga has been giving
its foremost priority on data analytics. Data analytics is one of the important tools
that guide the management in its growing business model and the decision making
of the company. Zynga relies heavily on the data analytics whereby it is to
improve its user retention and to increase collaboration among its gamers. Zynga
has been implementing the three key metrics that drive the economics of its social
gaming that is churn rates, the viral coefficient and the expected revenue. As a
result from using the three key metrics, Zynga now has turned its social gaming to
social graph analysis. With this new approach in gaming, Zynga is heading in
improving its player experience and make every aspect of the game its created to
be more profitable. This social graph data analytics is so useful whereby the data
collected are streamed in real time to a dedicated cluster daily. The data will
provide meaning information to the company whereby it can observe how its
player reacts to the game whether they like it or not. The data analytics also has
helped Zynga in improving its targeting of items such as creating gifts in the
game, in order to effectively increase the level of interaction between players. It is
also successfully minimizing spam to passive players. Zynga not only disrupted
the video game industry with this massive data analytics wonder, it also offer
more casual games and generates revenue by selling virtual goods in game. This is
the opposite of the traditional video game companies whereby they only sell
games to its customer. Therefore Zynga not only gives a new wave in the social
game industry, it also has opened up other traditional game-makers to move
towards similar business model as well.

2. What role does business intelligence play in Zyngas business model?

As a result of high in its churn rates, low in the area of effectiveness in

maintaining its existing players, low in its lifetime revenue for the game created,
and too much spamming, Zynga new business intelligence with the technology
from Vertica Systems has done magical improvement to its business model. The
new technology from Vertica Systems has help Zynga in solving its previous
problem whereby the Verticas data warehouse is able to work with compressed
data which improves performance by reducing processor demands, memory, and
disk input / output at processing time. With this new business intelligence, Zynga
achieves rates of performance are now 50-100 times faster than the other data
warehouses used by other company. Therefore, Zynga top management will
definitely make more accurate and timely decision in its business model. The
company social graph related data are now being streamed in real time to a
dedicated cluster that is generated daily. With this new meaning information,
Zynga may now experiments its new game and adjust it each day. Zynga also may
have the wonder to observe how players react and will able to find out whether
millions of its player liked it or not. The company will gain a huge improvement
in its business model, such as:

targeting items in creating gifts in the game ;

effectively increase the level of interaction between active players ; and

minimizing spam from passive players

In general, Zynga may now have more accurate production reports that make
concrete recommendations for business improvements on its social graph data.
The company also may have luxury in predicting reliable data from a huge social
network for its new created game. Social network platform like Face Book will
surely gives millions of active and reliable data.

3. Give examples of three kinds of decisions supported by business intelligence at

Zynga.

Below are the identified three kinds of decisions that were supported by business
intelligence at Zynga:(i) In Zynga perspective view, the company now has able to improve the
relevancy of each of their project in terms of providing gifts in their game in
order to effectively increase the level of interaction between active players.
They also have successfully minimized spam to their passive players.
Therefore, Zynga now is able to identify groups of users with similar
behavior or common path in order to get the precise targeting of game related
promotions and activities.
(ii) The idea of offering free games that are geared towards a larger and more
casual gaming is one of the business model provided by Zynga. The
company also generates their revenue by selling virtual goods in game. This
kind of approach has actually been around the industry for years. One of the
most notably example is in the game of Second Life and other virtual worlds.
They allowed users to buy apparel and accessories for their avatars. But in
Zynga case, the company put more attention to details, whereby countless
terabytes of data per day generated by its users the ability on a daily basis.
And this kind of attention has set Zynga apart from other traditional gamemakers. One of the example from data analytics provided shows that Zynga
gamers tend to buy more in game goods when they are offered as limited
edition items.
(iii) Zynga's Face Book application was previously able to send direct messages
to Face Book users, but they had disabled this feature due to spam
complaints. However, if our friends are using Zynga's Face Book application,
chances on seeing the advertisement encouraging to play, will definitely
prompt out in our News Feed windows.

4. How much of a competitive advantage does business intelligence provide for

Zynga? Explain.

Zyngas main competence has been seen from its integrating or linking system
that is Social Graph Analysis, Vertica System and its analytic teams. Below is the
elaboration on each identified competitive advantages:Integrating or linking system
(i) By providing business intelligence such as Social Graph Analysis and
Verticas Massively Parallel Processing (MPP) in Zyngas business, it puts
up the company in having a very strong competence in intelligence and
analytics capabilities in their business model. Social Graph Analysis shows
how Zygna can study data in determining how its players play, what types of
their players are most active, and what virtual goods does their players buy.
From that, Zynga can deliver valuable games to customer timely and can also
create games that may offer more profit in their company.
(ii) While for Verticas System is the data warehouse system that can compress
data much faster and tighter, at a rate of 10 to 1 (10 terabytes of data become
1 terabyte of compressed data). By using this system, Zynga can manipulate
data 50 to 100 times faster than their data warehouses used by other
companies. This system can support Zynga business model in analyzing big
data quickly and accurately.
(iii) By having social network platform like Face Book, Zynga can also measure
their gamers activity on real time and daily basis. Zynga targeted audience is
the segment of gamers that prefer casual games, and its goal is to make a
game that nearly anyone can play. Hence because of that, Zynga is using the
measurability of Face Book activity to guide its game management, and this
is one of the ways that helps Zynga creating a finely tailored user experience
that hasnt been seen before in gaming industry.
Analytic Teams
(i) Zynga human resource is seen as one of their competitive advantages. This is
because they have set up two (2) analytics teams which are reporting team
and analytics team. The reason in setting up both of the team is to work out
with the data and make concrete recommendation for business improvements
based on the data. By having these two sets of team shows that Zynga
4

internal resources are strong, competence and capable in giving precise and
targeted good views on which path should the top management decides in the
social gaming industry.

5. What problems can business intelligence solve for Zynga? What problems cant it
solve?

PROBLEMS THAT CAN BE SOLVED WITH

ZYNGA BUSINESS INTELIGENCE

Zyngas

analyzing

system

PROBLEMS THAT CANT BE SOLVED

WITH ZYNGA BUSINESS INTELLIGENCE

is

independent from its hardware.

Therefore, if the user is changing
from computes to mobiles or others,
their system allows it and can
convert to any devices.

It

helps

Zynga

in

Zynga business model relies heavily on

Face Book database. If any problems
caused by the Face Book system data base,
Zyngas system would not be able to solve
it. Once if Face Book system goes down,
Zyngas system wont be able to keep on.

identifying

characteristic and trend of the user

quickly. Zynga is able to react and
make changes of the characteristic
and trend as many as 100 daily
updates to its product.

It can surely not build loyalty among the

users in order for them to keep maintaining
playing the game produces by Zynga. The
system surely not be able to prevent any of
their user to move to another game
provider. Therefore, Zyngas still can be
beaten by their competitor in the social
gaming industry.