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Zynga Files IPO, Also Known as the Path to Billions

Dollar bills, y'all. The makers of FarmVille are going public.

WHO'S HUNGRY?
WHO'S HUNGRY?

There's a reason so many designers have put traditional games behind them, in favor of social games: there's piles and piles of cash to be had. Zynga, the developer behind Mafia Wars and FarmVille, is the biggest social juggernaut, and is poised to capitalize on its success.

The company has filed an IPO with the Securities and Exchange Commission today, with the hope of raising at a billion dollars.

IPO means a company is going public. Public means shareholders. Shareholders mean a company has to answer to the people who have invested in the company. It also means Zynga has a way to raise cash for expansion much, much faster.

"Dear potential Zynga shareholders, I’m proud and excited to be writing this letter to you today," said Zynga founder and CEO Mark Pincus in the documentation filed today. "Our strategy from the beginning has been to build the biggest macro bet on social gaming to provide our players with the most accessible, social and fun games. Despite our rapid growth, we have been careful to build for the long term. I’ve always thought of this journey as being a series of sprints that make up a marathon."

The biggest problem with any of the new business models is proving it out, by getting into the black and showing the pay-to-play model works. Zynga's financials show the company had a net incoming of $90.6 million in 2010, backed up by nearly one billion dollars in cash, as of this past March.

Patrick Klepek on Google+