Zynga loses users at a fast pace
Daily activity on the company's social games is plunging as players move away from the PC to mobile gaming.
Cowen analyst Doug Creutz said the daily activity on Zynga's social games fell 8.2% in May -- and that was after a 12% decline in April. He says the company is in a user tailspin. Take that 20% decline over two months and annualize it, and "that's a pretty severe rate of decline," he says in the following video.
Post continues below.
Zynga shares fell more than 10% Tuesday to close at $4.98 after Creutz issued his report. Just three months ago, shares were at nearly $14.
Zynga is directly tied to Facebook (FB), since it's the biggest developer of games for use on the social network. Some of Zynga's most successful games on Facebook include "FarmVille" and "CityVille." The games are free to play, but Zynga makes money when users plunk down real dollars to buy in-game items, such as farming equipment.
Both companies are hurting as users transition to mobile. Facebook has had problems getting a solid revenue stream from mobile users -- it doesn't display mobile advertising -- and Zynga has struggled to get users to transition to its mobile games. You can't blame Zynga for trying -- it spent a reported $180 million to buy the once-hot DrawSomething game, but even that game has lost daily users.
Zynga debuted last December at an IPO price of $10 a share.
VIDEO ON MSN MONEY
I have been playing Zynga games on Face Book. but recently stopped. They are greedy and want money for more sillly things all the time . This means those who can afford it will get farther in the games than those having to play for free items. They have way to many quests too close together. People are always complaining about having trouble in playing the games as they are so hard to get into or gifts don't get to the recievers etc.
I like Zynga games, in general, but they have made the games more and more complicated, requiring you to spend more time playing each. I liked it better when you could spent a little time in multiple games every day and accomplish something. The increasing amount of time the games required is why I stopped playing.
People who have jobs and other things to do are more likely to spend money (because they have it to spend). Zynga is catering to people w/o jobs who have all day to play games. They don't get it.
Lose Facebook, Lose Zynga, No Mafia Wars, no Farmville and you will be much happer and even perhaps have a life.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] S&P futures vs fair value: +2.70. Nasdaq futures vs fair value: +8.50. Equity indices are on track to begin the Tuesday session on a modestly higher note as futures on the S&P 500 trade almost three points above fair value. Futures spent the bulk of the overnight session just below their flat lines, but returned into positive territory during the past 30 minutes. There was no news coinciding with the move, but it is worth mentioning that Germany's DAX (+0.5%) climbed ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'