Zynga profits down 95 percent in last quarter

The Facebook-based game publisher Zynga has yet to launch its public stock offering but the privately owned company still has to release financial info before the IPO launches. Today the Wall Street Journal reports that for the quarter that ended on June 30, Zynga announced that its profits went down to just $1.3 million, a massive 95 percent drop compared to profits of $27.2 million that the company recorded at the same time period a year ago. The company recorded overall revenues of $279.1 million for the quarter. While that number is double the amount it received at the same time a year ago, it's also a much lower amount of growth compared to Zynga's previous financial quarters.

Zynga also admitted that the daily amount of players for its various games, including Cityville, Farmville and others, went down to 59 million users in its last quarter, compared to 62 million users from the previous quarter. Zynga blamed the lower profits and smaller player base on the fact that the company didn't launch any new games in the first half of 2011. Since then the company launched the strategy game Empires and Allies and the quest-based game Adventure World. Earlier this week it announced plans to launch Mafia Wars 2, the sequel to one of its longest running Facebook games, later this fall.

Zynga is still expected to launch its IPO by the end of 2011. The stock launch is expected to raise $1 billion for Zynga and give the company a market value of about $20 billion.

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I really hope they do. I'm an active player on Cafe World, but some days it's absolutely tiring having to go from goal to goal, send requests only to friends that actively play, avoid your non-Cafe World friends from seeing posts you publish to your profile, in the 'hopes' someone will click and get you the thing you need, bothering more friends to join to complete a goal, etc.

Not to mention it constantly is a memory chug, and it's probably not good for energy use.

x-byte said,
So many that can't read an article it seems. Their revenue increased.

May be the revenue was calculated using the previous period.

x-byte said,
So many that can't read an article it seems. Their revenue increased.

Their revenue increased yet their profit decreased and they blame this on the fact they did not release a new game... It's really a contradictory story there from them. It would make me wonder if what they're saying there is that most of their profit comes in when a new game is released and then people jump ship as they get bored of the games quickly. That's not particularly good either.

I blame the lack of HTML5 games. I simply REFUSE to play any Flash games like Zynga Poker. They are slow as molasses, and eat up huge amount of CPU power. Unless they ditch flash and move onto HTML5, Zynga is dead.

Gigi Buffon said,
I blame the lack of HTML5 games. I simply REFUSE to play any Flash games like Zynga Poker. They are slow as molasses, and eat up huge amount of CPU power. Unless they ditch flash and move onto HTML5, Zynga is dead.

html5 is slower than flash and could use a lot more cpu.

Magallanes said,

html5 is slower than flash and could use a lot more cpu.

Depends on the browser, html5 is not in itself slow (being just a script, that's like saying a text file is slow), but the renderer could be.

No surprise...
The overall amount of new FB users is limited and Zyngas only goal is get new players.
Bugs, no response to feedback or suggestions, the only social aspect is "click begging" and wallposts for any little damn, they not care if users stay or not.

I hate that everything they do is Micro-Transaction you can not enjoy any of the games really .

unless you fall for the stuff and buy all this micro transaction items

This whole F2P is not good

This is partially Facebook's fault, and partially because it was a trend they cashed in on. Facebook apps are barely used by most people anymore for two reasons: 1.) they're tired of them and 2.) Facebook purposely has been burying the functionality of apps to a.) make people use the main platform more and b.) not annoy people and make people jump ship like Myspace. Zynga has been doing a great job by making mobile games that hook people just like Farmville did on Facebook, but I think the Facebook boat has sailed.

Dermot said,
teach them to do nothing but fill facebook with spam.

They haven't been able to find a game to steal for the past few months I guess....

mrp04 said,
Who is going to buy their stock after this news?
Not me, but I wouldn't regardless..

In any case, they are a Profitable company. You'll always find people to buy stock of a company turning a profit, even if it's not as big as it was before, profit is profit.

mrp04 said,
Who is going to buy their stock after this news?

If the price is right, I would. It could only go up if they make more games. With enough money behind any company, say the estimated $1billion, they could generate a short-term profit on your investment.

Andrew Lyle said,

If the price is right, I would. It could only go up if they make more games. With enough money behind any company, say the estimated $1billion, they could generate a short-term profit on your investment.


They introduced more and more paid for content, to the point people no longer want to play due to not having a fair chance. Its the same reason why many micropayment free to play games die off. Having paid for content that gives an advantage over non-paying customers generally means one thing. Players with the most real life money wins. I can see the 3 million users just leaving for that very reason.

Then if we look at the games, they've been bloated to the point they're pretty much unusable by the older machines now, and the constant slow servers they use doesn't help at all.

sagum said,


They introduced more and more paid for content, to the point people no longer want to play due to not having a fair chance. Its the same reason why many micropayment free to play games die off. Having paid for content that gives an advantage over non-paying customers generally means one thing. Players with the most real life money wins. I can see the 3 million users just leaving for that very reason.

Then if we look at the games, they've been bloated to the point they're pretty much unusable by the older machines now, and the constant slow servers they use doesn't help at all.

+1. And they've gotten really ridiculous with their pricing too. No wonder people are upset.

And the bugs are horrendous...

Lachlan said,

probably ever since facebook made it easier to block spam its hit them hard

Yeah. And what junk they do publish to user profiles now is worthless to the players.