In just one year, Zynga lost nearly half of its daily active users


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In just one year, Zynga lost nearly half of its daily active users

Amid executive reshuffle, gaming studio loses $61M in Q1 2014.

by Cyrus Farivar - Apr 24 2014, 12:40am GMTST

zynga.pincus-640x425.jpg

 

It's been a rough year for Zynga, which has relegated founder Mark Pincus to being chairman of the board.
 

Zynga needs some good news, and fast: in its Tuesday quarterly earnings filling, the company reported that its daily active users rose from 27 million in the last quarter of 2013 to 28 million this quarter. But when compared to the first quarter of 2013, Zynga had 53 million daily active users?which means the company has lost about half of its most active players in a year.

 

Just months after Zynga spent $527 million on NaturalMotion, maker of Clumsy Ninja, the embattled social gaming firm also announced that it ended its first quarter by losing over $61 million. At this time last year, the company had profited $4.1 million during the first three months of 2013.

 

Still, the company's chief executive tried to play the loss down.

 

?In Q1 our teams delivered a solid start to the year against our strategic frame of growing and sustaining our franchises, creating new hits and driving efficiencies. We have established a strong base for 2014 and believe we are pacing well for a year of growth,? said Don Mattrick, Zynga?s CEO, in a statement.

 

However, Zynga also re-organized the deck chairs: former CEO Mark Pincus, who had stayed on at the company as the Chief Product Officer is now ?moving on,? but he will remain chairman of the board of directors. Pincus, who founded the company, was ousted as CEO in July 2013 in favor of Mattrick, a Microsoft Xbox veteran.

 

Given his experience in Redmond, Mattrick also announced that Alex Garden would take over as Zynga?s new president, having previously served as General Manager for Xbox Live, among others. He also announced that Henry LaBounta would take over as the new chief visual officer, and Jennifer Nuckles would take over as the company?s new chief marketing officer.

 

http://arstechnica.com/business/2014/04/in-just-one-year-zynga-has-lost-nearly-half-of-its-daily-active-users/

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Praetor

it's the nature of this "mirage" companies: they inflate and grow massive in a very short amount of time and it takes the same or even less time for they go into forgotness.

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PGHammer

it's the nature of this "mirage" companies: they inflate and grow massive in a very short amount of time and it takes the same or even less time for they go into forgotness.

Actually, it's that Zynga has more competition than it did when the IPO launched - where were Plarium and King Digital when Zynga went public?  (While Plarium was more known, it was largely outside the US - their presence in the US - and especially on Facebook - was small compared to Zynga at the time - same applies to King Digital, which has since gone public itself.)

 

It is ALSO why - despite my liking the games of all three companies - I bought the stock of neither Zynga OR King Digital.  It has nothing to do with either company, but more an after-effect of the original dotcom bubble - I'm waiting for the shakeout to happen.

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Astra.Xtreme

"Gaming" companies like this that live on advertisement and in-game purchase income will never do well long-term.  The fads die off, the people get bored, or something else better comes along.

 

The same demise will eventually hit Facebook, but as we can see, they are buying up companies to hopefully diversity their business.  I'm not convinced it will work, but at least they're thinking in the right direction.

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