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.
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.
3 stocks will be in the spotlight Thursday as investors try to make sense of the numbers from the sector.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.