June 13, 2012

Zynga Stock, Player Base Slips To Low Numbers

Enid Burns for redOrbit.com

Since its IPO last December, Zynga has gone from a wildly popular game publisher with over 10 million regular players with the company valuation at $10 billion, down to a dwindling company with roughly six million players and a stock price falling under $5. During the IPO, the stock began trading at $9.50. Analysts are taking note that audiences are moving from the popular "-ville" games such as FarmVille and CityVille to other games.

It should be noted that while the flagship FarmVille and CityVille games are swiftly losing audience - reports from AppData show the games went from 10 million people playing CityVille daily and seven million playing FarmVille each day in December to a respective six million and three million in May - other Zynga games still top the Facebook app charts. It's still a significant drop for Zynga, and an article on The Telegraph U.K. cites a falling audience as the cause for the company's falling stock price.

As of June 13, Zynga tops the developer rankings for Facebook app developers listed on AppData. Zynga clocks in with a little over 250 million monthly active users. Socialcam (79 million); Microsoft (65 million) and Yahoo! (56 million) follow a distance behind the app developer that the industry is stating is on the decline.

Individual apps are more telling for some of the company's troubles, according to rankings on AppData. Socialcam, while it's the second most rated app developer, is the top-rated app with 79 million monthly active users. That top app is followed by Yahoo! Social Bar (41 million); Texas HoldEm Poker (35 million) and MyCalendar Birthdays (34 million). CityVille is ranked in the fifth spot with 32 million monthly active users. In fact, in the top 15 apps, Zynga has five apps listed in the ranks including Texas HoldEm Poker (35 million monthly active users); CityVille (32 million); Draw Something (25 million); FarmVille (22 million) and CastleVille (20 million).

Analysts are attributing a shift in online app-based games to mobile games for the drop in audience. Forbes writer Eric Savitz quotes a Cowen analyst Doug Creutz research note. "We believe that consumer preferences may be switching decisively to mobile games given that game quality is similar, if not better, and mobile games have the added advantage of being playable at any time, anywhere. While Zynga is aggressively pursuing mobile game development, its biggest advantages of scale and cross-promotion remain largely confined to the Facebook platform."

Zynga acquired Draw Something in March, which currently holds the eighth rank in the AppData App Leaderboard. After outdoing Words with Friends, Draw Something has reportedly taken a hit on audience retention. The purchase was a step toward Zynga leaving the social virtual worlds of the "-villes" for engaging apps that don't require building on a world. Many of the apps moving up in the rankings, including ones from Zynga, are easier to drop into. Texas HoldEm, for example, is played one hand at a time, rather than building a home in CityVille or farm in FarmVille. The loss of audience could just be fatigue of maintaining a virtual world.