From the looks of it, this year’s crop isn’t all that good for FarmVille creator Zynga. In fact, the once glory of social gaming, had such poor second quarter results, its stocks dropped.
The creator of the very popular Facebook games seems to be having a hard time staying current in the internet industry. It looks like 2012 is not Zynga’s best year. With all the tech industry changing to mobile, more and more people are starting to give up the good old social gaming.
Fact is Zynga is losing money big time. In the second quarter Zynga lost $22.8 million or 3 cents a share and things look like they’ll keep going south. It’s a real time meltdown, Zynga is challenged to stop and redress.
After Zynga’s second quarter results were published, the markets immediately felt the damage. Zynga’s stock fell 39 percent in the morning to $3.12 a share. It’s basically the biggest drop Zynga’s stock saw since December’s IPO.
Although Zynga might have made one of the biggest mistakes a developers these days could have made, the company blames its poor second quarter results on Facebook. The game developer argued the changes Facebook made to the site made it difficult for users to find and play their games.
Zynga’s last two games didn’t prove so successful. Mafia II and The Ville, were expected to have the success of their predecessors, but it seems that the public wants something else. John Schappert, chief operating officer, said in a conference call with analysts: “These changes favored new games. Our users did not remain as engaged and did not come back as often.”
In an interview, Mr. Greenfield, analyst of BTIG said: “Right now, everything is going wrong for Zynga. In a rapidly changing Internet landscape that is moving to mobile, it’s very hard to have confidence these issues are temporary.”
Sterne Agee & Leach Inc analyst Arvind Bhatia said of Zynga’s poor second quarter results: “It’s starting to look more and more like a fad, and any hope of a second-half recover is shot with these kinds of numbers”.
For the moment being, Zynga remains the top social game developer. But to keep that status throughout 2012, Zynga needs a better, more personal approach to regain its popularity with Facebook users.