Game over for Zynga?

“Online poker is one of the many games offered by Zynga, a firm that was once the poster child of the social-gaming revolution. But anyone buying its shares today would be placing a very risky bet,” The Economist reports. “On June 3rd Mark Pincus, the firm’s boss, announced it was firing over 500 people, or roughly 18% of its workforce, in a bid to turn itself around. The company is also expected to shutter offices that it had opened in New York and Los Angeles.”

“Zynga’s fall from grace — its shares closed at $2.99 following Mr Pincus’s announcement compared with $10 at the time of its initial public offering in 2011 — is all the more striking given that more and more people like playing relatively simple games online,” The Economist reports. “According to an estimate by eMarketer, a research firm, the number of Americans playing games like Farmville and Words With Friends, two Zynga offerings, is expected to grow by more than 5% this year. ”

The Economist reports, “So why is Mr Pincus swinging the axe? The answer is that Zynga built its business model around desktop-computer gaming, which was all the rage in the years after the firm was founded in 2007… But more and more social gaming is now taking place on fast-growing mobile platforms such as smartphones and tablet computers, where Zynga is far weaker… The firm’s revenue in the first quarter of the year fell by roughly 18%, to $264 million. If Mr Pincus cannot halt the slide, it will be game over for Zynga.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “David G.” for the heads up.]

14 Comments

  1. Perhaps what they also did wrong was change some of their games so they no longer worked properly or as expected. eg their Dream Heights game was changed, the new features did not work as expected, then they added new floors to the game and you could not get the people to move into those floors that were needed even after hundreds of possible neighbors… made the game no fun and stopped playing and have never gone back.

    1. Yes, interesting how people stop playing games that don’t work properly. Amazing how companies keep releasing games and updates that have significant problems, and that those could somehow not be identified prior to launch.

  2. Another on trick pony with an ego as big as all outdoors. Maybe he needs up join up with Mickie D. Farmville, exclusively on a Dell – a good combination.

    1. The problem with Words with Friends is that Newtoy sold out to Zynga. WWF is a much better game than Scrabble.

      I also love Scramble with Friends. Running with Friends would be a GREAT arcade game if it weren’t shoehorned into the “With Friends” motif that screws up gameplay royally.

      Matching (only an idiot can lose this game moving second), Phrases, and Hanging With Friends I’m not fond of, and I haven’t tried their other games.

  3. Zynga? You mean the company whose business model involves ripping off other games to come up with their “ideas”? Couldn’t happen to a nicer bunch of guys.

    ——RM

  4. What I find amazing is how 500 people only is 18% of the work force… This company is really too big for what they are doing. What are all those people doing? And this company as already fired allot of people in the past I believe.

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