Analyst: Declining Zynga User Activity 'Extremely Troubling'

October 27, 2011 -

Cowen and Company analyst Doug Creutz says that the continued user decline in various Zynga games on Facebook is "extremely troubling."

"Three of the five recent launches ('Empires & Allies', 'Pioneer Trail', and 'Adventure World') have suffered 40%+ DAU drops off their post-launch peaks, while 'Mafia Wars 2', launched two weeks ago, is already showing signs of having peaked. We think the lack of user growth at Zynga - which is really a two-year old problem - could cause issues ahead of a potential IPO in November, particularly given an expected rich valuation," he said.

Of course Facebook recently changed the way it counts Daily and Monthly Active users, so that is changing the number of users dramatically - at least in the last couple of weeks. Still, even new titles aren't helping to stop the player drop off on Zynga's games. As Creutz points out, newer games are "largely cannibalizing users from old titles, and failing to attract new users to Zynga’s portfolio."

Creutz goes into detail on why user drop-off may prove to be a serious problem for Zynga - particularly because the company is moving towards going public soon:

"At least as disturbing has been the degree to which new launches have begun rolling over almost immediately after the initial launch. Three of the five games (Empires & Allies, Pioneer Trail, and Adventure World) are already down more than 40% from peak DAU levels. Mafia Wars 2 hit a DAU peak 8 days after launch and has gone sideways for the last week; while it is very early in the game’s lifecycle, we view this as a bad sign, particularly given that Empires & Allies, Pioneer Trail, and Adventure World hit peak levels between 5 and 18 days after the initial launch. Only Words With Friends has enjoyed sustained DAU growth (and we note that this was a Facebook port of a popular mobile game that Zynga acquired, i.e. not developed internally at Zynga). In sum, we view the user trends at Zynga as extremely troubling given the apparent lack of organic growth, particularly in front of an IPO that continues to be talked about at rich valuations in the $10B range."

Source: IndustryGamers


Comments

Re: Analyst: Declining Zynga User Activity 'Extremely Troubling'

I've been told that Facebook Gaming is mainly an American thing?

Re: Analyst: Declining Zynga User Activity 'Extremely Troubling'

This is where investors take missteps. They look at a company like Zygna with out understanding deeply the industry they are in and the product they sell. Zygna games have largely been ripped off, simple games that keep people hooked with skinner box tricks and nothing else. They are not the kinds of games that keep people coming back for more.

Online, mobile, and free to play games are seeing a huge explosion with a lot of developers and publishers putting out games of MUCH higher quality that what Zygna currently offers. Unless Zygna can hire some talented developers they are going to be a foot note in gaming history.

Re: Analyst: Declining Zynga User Activity 'Extremely Troubling'

"Troubling"?  It's fantastic news for fans of real games.

Re: Analyst: Declining Zynga User Activity 'Extremely Troubling'

The only group of people which it would be troubling for would be those that didn't see the Zynga style "game" bubble popping anytime soon.  If anything, I'm surprised that it didn't pop sooner due to the semi recession.

Though, the consoles and PCs did see one released recently called Skylanders: Spyro's Adventures.  You'll need at least 40 bucks on top of the 70 bucks for 2 more levels, plus any other extra figures (8 a pop) to cover any element holes that are in the 20 buck 3 figure + Level pack.  And from what I've heard, it gets pretty arm twisty in letting you know that you need moar figures just like it gets pretty arm twisty in some Ville games (Frontierville I've seen it happen in) saying you need moar friends  for things

 
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Andrew EisenSarkeesian and Quinn continue to get harassed and attacked and so, the story stays in the headlines. If Wolfe gets swatted again, it will be in the news again.09/19/2014 - 6:56pm
Andrew EisenYou mean Wesley Wolfe? The swatting appeared to be over his DMCA takedown, not due to his color or gender.09/19/2014 - 6:53pm
ConsterSo Sleaker, what's the sand like?09/19/2014 - 6:53pm
quiknkold@CraigR. Spreading Misandry is not going to kill Misogyny. Its just going to fuel it. half the people supporting that arguement are mysoginists themselves. They just dont know it.09/19/2014 - 6:51pm
Sleaker@CraigR - there's nothing to get over. There's no issue here until someone does an actual study on harassment rates.09/19/2014 - 6:48pm
quiknkoldWe never said Gamers were the only victims. Yes, Anita and Zoe got a bad rap. Yes, Zoe's ex was way out of line. Do I disagree with them? Depends on the arguement. Did they deserve what happened to them? Hell Effing No.09/19/2014 - 6:48pm
Sleakerbut news outlets have a tendency to blow up and sensationalize it if the person can be desrcibed as a minority, maybe because it gets the hits. How long were the 2 recent swattings in the news for? 1 was a white male developer....09/19/2014 - 6:47pm
Craig R.Get over it.09/19/2014 - 6:46pm
Craig R.Gamers are just lucky that their behavior wasn't brought to attention of everybody else sooner, and gamers are pissy about that09/19/2014 - 6:46pm
SleakerIn fact, just because a few female developers every year get harassed doesn't make it systematic. As a whole developers are harassed by people.. Swatted, etc.09/19/2014 - 6:46pm
Craig R.And if you don't think misogyny and sexism is widespread, then you're living with your head buried in the sand09/19/2014 - 6:45pm
Craig R.Apparently it's the gamers who are the only victims from GamerGate09/19/2014 - 6:44pm
Sleaker@AE - 1 person getting harassed is a problem. But just because 1 person gets harassed for being a female developer doesn't mean it's a systematic problem or indicative of a whole demographic.09/19/2014 - 6:44pm
Andrew EisenI don't believe anyone said or even remotely implied that harassing anyone was okay.09/19/2014 - 6:41pm
quiknkoldGeneral are being harassed, doxxed, hacked, just because they are being perceived as white males. And what about the White Males who are victims. Its ok to harass them? Anita Sarkeesian gets a bomb threat yeah, but what about the others.09/19/2014 - 6:36pm
quiknkoldwhat about all the gamers who are being harrassed, Andrew. Why does it have to be just about the women in the industry. We have 2 women, and only a handful of accounts recorded. While you could throw a dart at the internet and find a site where Gamers in09/19/2014 - 6:35pm
Andrew EisenOkay, you're talking specifically about harassment of women in the industry. So... how many (or what percentage of) women have to be harassed before you'd consider it a problem?09/19/2014 - 6:27pm
SleakerSo I think at best, we can just say something akin to 'there might be a problem, but we need more reliable information'09/19/2014 - 6:11pm
SleakerBut that takes someone actually doing a legitimate study on females in game development workplaces etc. And so far a good number of studies that get shoved into the center of attention are sensationalized through shoddy metrics and practices.09/19/2014 - 6:10pm
Sleaker@AE - I think there are select instances of gender problems that are highlighted, but I don't believe they are the norm, or 'widespread.' What would be more helpful is to show hard statistics. 1 in 100 female developers is harassed or somthing like this.09/19/2014 - 6:10pm
 

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