The lights are on
It was a rough quarter for social and mobile publisher Zynga. The company has reported significant losses and a precipitous drop in unique users both year-over-year and in consecutive quarters.
According the second quarter financial release, Zynga lost $15.8 million dollars in the most recent quarter. What's worse for the company is the significant erosion of its user base. Monthly unique users dropped from 192 million in 2012 to 136 million (36 percent). This also represents a drop of 22 percent from last quarter.
Daily active users dropped 45 percent year-over-year, and 24 percent from last quarter. All of this is a troubling trend for the company.
Zynga recently laid off a significant number of staff and has seen a steady exodus of key officials. The company was in the news recently for the acquisition of Don Mattrick, former head of Microsoft's interactive business and the person at the center of much of the Xbox One controversy.
Zynga is projecting net loss for next quarter ranging from $14 million to $43 million, but Mattrick offered hope for the future. "The next few years will be a time of phenomenal growth in our space and Zynga has incredible assets to take advantage of the market opportunity," he said in a statement. "To do that, we need to get back to basics and take a longer term view on our products and business, develop more efficient processes and tighten up execution all across the company. We have a lot of hard work in front of us and as we reset, we expect to see more volatility in our business than we would like over the next two to four quarters. I'm privileged to lead Zynga and I look forward to spending more time with our players, employees and shareholders."
Our TakeZynga's user base is walking away from the company. In addition to what we heard earlier this week from EA on its shift away from Facebook, this spells trouble for the Farmville publisher.
The company needs a drastic shift in culture and product. Solstice Arena, a mobile, streamlined MOBA, is a perfect example of ways the company can compete in today's market. Zynga bet too big on Facebook and cloned games. It needs to invest in innovation, ethical monetization, and unique experiences in order to survive.
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As much as I want to feel bad for the company because there are probably some hard working people that live pay-check to pay-check there, I find it hard to because I have had nothing but hatred for this company ever since I first heard about them. At the very least, Maybe Don can turn the company around. He is the one who made the 360 such a successes after all
I'm not surprised at all. If Zynga wants to survive, they need to make some big changes. Otherwise, they may not last much longer.
There's no hope for Zynga. You can't innovate out of thin air and you sure as hell can't motivate people who are watching their company implode. Unless they can raise new capital and get a team to develop a smash IP, all Mattirick is gonna do is ride the Zynga train into a bankruptcy station.
It's only gonna get worse with the pr nightmare that is don mattrick at the helm.
The perfect example of too big too quick!