Zynga 'might have been a fad,' analyst says as stock plummets
Once a media and investment darling, social gaming giant Zynga is coming on hard times. The company released its second quarter earnings, causing the stock to plummet as much as 40% in after-hours trading.
Once a media and investment darling, social gaming giant Zynga is coming on hard times. The company released its second quarter earnings, causing the stock to plummet as much as 40% in after-hours trading.
The company posted a loss of $22.8 million, and revised projected profits downward from 29 cents a share to 23 cents a share, a figure that has investors panicked.
Shares in the company are hovering around $3 in after-hours trading, below its $5.08 closing price, and well below the $15.91 high it once traded at.
Zynga CEO Mark Pincus blamed the late launch of The Ville and lackluster performance of Draw Something for its lackluster results. The company had paid over $200 million to acquire the developer behind the former drawing phenomenon.
Some analysts are quite displeased with Zynga's potential. "The results are a disaster," Sterne Agee & Leach analyst Arvind Bhatia told The Wall Street Journal. "It's looking more and more like this might have been a fad." Some Shackers might be shaking their heads, muttering "we told you so."
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replyAndrew Yoon posted a new article, Zynga 'might have been a fad,' analyst says as stock plummets.
Once a media and investment darling, social gaming giant Zynga is coming on hard times. The company released its second quarter earnings, causing the stock to plummet as much as 40% in after-hours trading.-
Anybody surprised?
Anyone?
Anybody?!
Hello?
Good. What an awful company.-
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yeah I am surprised. They seem to be well positioned to make a lot of money.....
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While it was sort of nice having everyone and her cat playing games (making gaming seem less fringe), i would be happy to see less emphasis on casual stuff
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What does that even mean? He thinks social/mobile freemium on the whole is a fad? Lot of people are making a lot of money with it even if Zynga is having some trouble... It's not unlike any other game segment, it's still hit driven and you can oversaturate your customers with the same shit (see rhythm games).
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if it's a fad then it would be simple enough to correlate Zynga's decline with various iOS apps and others that use the same model. If Zynga has been faltering for 3 quarters now then surely the same trend should be reflected in mobile app stores and freemium games there. The reality is the top grossing list in the iOS app store is still filled with freemium and microtransaction stuff, many not markedly deeper than what Zynga does. So then even if you still want to argue it's a fad, it would appear that Zynga's current decline has more to do with their own execution than the state of freemium as a whole.
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right, and I was just saying if this analyst is calling what Zynga does a fad as an explanation for their tumble, then it must be happening elsewhere to similar products. But it isn't. So it may still be a fad, but that's not the problem with Zynga, so he's wrong.
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Maybe it means he should've been paying more attention to Zynga's track record before their IPO in December 2011, and how FarmVille and FrontierVille were its best titles, and that it hadn't approached the same level of daily active users since FarmVille and FrontierVille.
It's easy to say that in hindsight, but back when the IPO talk was in motion, I was still baffled at analysts thinking it was a good prospect, because it didn't sound like any revolutionary games were about to be released by Zynga.-
CityVille was bigger than both.
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That's the one I was forgetting. There was an article in summer of last year (I forget which site; maybe Develop) tracking how the active users were dropping off after CityVille, and it basically said, "if Zynga doesn't have a 'next big thing' in the pipeline, this could mean diminishing revenue." An obvious statement to make, but Zynga didn't have anything big for the end of last year.
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yeah, but this is like, standard game company stuff. If you don't keep making hits, you lose revenue :o
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Seriously, who didn't see this coming?
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uh investors? lots of people clearly.
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If they didn't see this coming, then they're not paying close enough attention to their investments.
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there will always be idiots that enjoy farmville sadly
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Broke the front page with that unbroken string of HAs ...
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Oh, man...the schaedenfreude... :|
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Whoops, I spelled that wrong.
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If you think that the grind in MMO's like WoW are bad, the grind in casual freemium games are even worse.
For example, in Cafe World, the newest mission set is Baby Chai and Grandpa.
15 days of cooking missions, each goal requires at least one dish and sometimes two. these dishes can take up to 3 days to complete, but most average 12 hours.
68 different part types, each needing between 6 to 14 parts each
Family Tree goal -- 10 levels, starting at 6 parts and increasing each level until you need ~50.
2 buildables -- each needing 40 parts each.
2 Catering Campaigns -- each with 3 catering missions of about 2000 dishes and 42 parts that have 3 day timer. The cooking alone (given a lot of stoves and cooking boosters) is 31600 total cooking hours.
You are limited to asking each friend once a day, and you can only ask about 80 times per day. If you have great friends, and have completed some of the previous special events, you can have possibly 200 of the 150% speed stoves.
It is a mess.
I havent started on the Grandpa and Baby Chai
I havent started on the Olympic set (about the same number of missions and parts) that expires in less then 2 days
I havent started the Joe and Lisa Family Vacaction -- 36 missions, 2 catering jobs, and 2 goals (10 levels, starting at 6 parts and increasing each level until you need ~50). This event has expired so I cannot get the rewards for completing it.
Imagine this is WoW.
Your level 85, and Blizzard opened a new dungeon but it is only going to be open for the next 10 days.
Before you can get to the dungeon, you have to complete a bunch of missions. Kill 100+ mobs (so are elites) in 10 different zones, gather 1000 random items, and a bunch of deliveries. Plus you need to run 5 daily's for 5 days. Now you have the key to the Instance.
Nice, you can get in the starting area. Oh, wait, you can't get into any of the wings because you need to be Exalted with each separate faction. You have to run the starting area about 20 times to get your faction up, but there only 4 daily's available to boost it along.
Now you can get into each wing, and start grinding it.
The instance is now expired. The instance is still open, there is still some ups in here, but the best loot is gone. You can still grind out the rep, earn some achievements, but the loot is now greens.
Hey, look, a new dungeon just opened!
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What is a cooking booster and where can I buy one irl?
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My god what is this...
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Wow, that's... a really good explanation for an ex WoW player like me... that's insane.
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This post is really funny to me for some weird reason.
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what is this madness
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But it was probably more fun to grind through my poorly written essay then to actually play the game.
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Holy shit. I knew these games were dull but... jesus.
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When you first start out, it is fun. Designing the layout of your cafe, earning new dishes, etc. But it doesnt take long for the reality to set in. Hundreds of missions, many on timers. All the clicking. Begging for parts.
It is a grind. I would try grinding Hydraxian Waterlord rep then play CafeWorld. But I have to keep the GF happy, so... *sighs*
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What they're trying to do is make it near impossible to succeed without spending money.
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LOL. I did a horrible job of typing that up.
But, yes, it is insane. A new player is so far behind and under-equipped that the new timed events are impossible.
Each event is timed, some are 10 days, some 12, a few run 15 days.
Each event has a bunch of cooking missions (between 10 and 40). Each cooking mission requires up to 150 servings of at least one dish (sometimes two) and requires between 10 to 32 parts.
Each event has at least one catering mission, which requires a 100 to 900 servings for separate dishes (some of which can take 3 days to cook). These catering missions are one a separate timer, normally only 3 days. But, you can group up with other players (up to 16) and grind through them in day.
Each event has at least up to four "buildables". Each buildable requires that you send part requests to your Cafe World friends. It requires several hundred parts divided into 10 stages, and you can only ask each person once a day and only up to around 50 people.
Before one event is up, they issue another timed event. It is not uncommon to have three different timed events running at the same time.
And this is just CafeWorld.
FarmVille has events, but they have fewer parts and crops need. However, you can have 6 different farms (standard, English, Jade Falls, others). Each will have the a separate event running.
One of my GF's CafeWorld friends is a Russian with deep pockets. Not only does he grind out the dishes (like everyone else), he spends around a $1000 a month on spices, specialty stoves (some of which can cook 8 servings of a dish at time, and reduces the cooking time by half), and limited edition decorations.
This is what Zynga is wanting. Not the casual player that might spend $15 a year, but the players that spend $1000 a year. Of course, by making it so that you can only enjoy the game and get all the rewards by spending real cash, you drive away the casual.
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you mean 1000 a year right, please say you meant 1000 a year
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The russian? No. He posted one month what all he had purchased, and it was over $1000 that month alone. I always figured he was a mobster or something.
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No kidding? I'm shocked.
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Pretty sure someone would happily fill that void
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Some people will always play shitty games that are designed around addictive behavior, but *most* people will catch on given a little bit of time and realize what kinds of tricks are being used on them. The whole scheme is amazingly shallow and apparently based on the same basic set of hooks.
The market will shrink, probably dramatically, and then level off. That's my guess. Somebody else will figure out a new and clever way to target "casual gamers", but this particular cynical cash grab has a shelf life. -
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I played one game by them. Scramble with friends. I had fun with it. I could play quite a few times per day, and the game was fun. It cost one token to play, and one to "upgrade" to two powerups instead of one. That was ok, with 14 tokens per day, and with them regenerating, i could get a good few games in. i never felt the need to buy tokens to be in a level playing field.
Recently, they introduced a new thing where you could pay an additional 3 tokens to get another power up. now, to be on a level playing field, i had to spend 5 tokens out of 14. so, the game forced you to either buy tokens, or potentially be playing against people with an advantage.
i uninstalled it the day after that change. it felt pretty shady. =/ -
Jesus I'm glad my interview flopped.
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YES!
Zynga is the parasite of the gaming industry and should be attacked from all fronts.
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