Zynga Announces Disappointing Fiscal Quarter, Needs to Get Its Act Together

Social gaming’s biggest dog, Zynga, is trying to deal with the fact that its once-iron bite is softening a bit. The company stocks plummeted after a rough fiscal quarter, and there’s no sign that it’ll be pulling up any time in the near future.

Zynga was expected to pull in about $344 million through its last fiscal quarter. Instead, it saw revenues of $332.5 million, a loss of approximately $23 million. Following the revelation of Zynga’s earnings, investors jumped ship and its stock fell 40% in after hours trading.

Zynga’s revenue has actually seen a 19% increase year-over-year, but investors are losing confidence nonetheless. CEO Mark Pincus has blamed changes to Facebook for Zynga’s problems, and also admitted that the late launch of The Ville for Facebook struck a blow to user engagement.

Let us not forget the badly-scribbled elephant in the room, either: Zynga paid $210 million to acquire Draw Something, and the app’s popularity faded almost immediately after the purchase.

It’s not all doom and gloom for Zynga, though. The Ville and Bubble Safari are both performing well, and currently have over 6 million daily active users each.

Matching With Friends demonstrates that Zynga is working on mobile games, but is it too little too late?

However you look at Zynga’s problems, you inevitably wind back and realize the company really only has itself to blame. Zynga was slow to jump on the mobile bandwagon, and most of its biggest games ‘borrow’ enormous handfuls of ideas from previously-published games. If any company has the money and manpower to evolve the social games genre, it’s Zynga, but it refuses. It keeps hoping that the same tricks that helped Farmville’s popularity blast into the stratosphere will keep on working in one game after another, never realizing that people are kind of done with item harvesting and Facebook wall spam.

Worst of all, Zynga seems to have trouble learning from past mistakes. This article from What Games Are outlines Zynga’s tendency to dump veteran users in favor of big shiny ‘upgrades,’ even though it’s a terrible idea to abandon a user base that has sunk a great deal of time and money into an established world.

Zynga will recover and it might even thrive again, but only if it puts some serious effort into strengthening and changing the genre it helped bring to the mainstream. Do you think the company will actually get a clue and settle down to work on a new battle plan?

[via Gamasutra]

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