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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ZippyDSMleeuuuhhhggg in other news been sick since last night.....uuhggg.....I iwsh it did not hurt so much when my tummy wants to leave my body..02/28/2015 - 11:39pm
ZippyDSMleeBrings me to the Q why alt costumes would be needed in competition anyway... http://www.eventhubs.com/news/2015/feb/28/dead-or-alive-community-aims-ban-over-120-overly-sexualized-costumes-dead-or-alive-5-last-round/02/28/2015 - 11:36pm
MonteThough from a business side, i would agree with the article. While it would be smarter for developers to slow down, you can't expect EA, Activision or ubisoft to do something like that. Nintnedo's gotta get the third party back.02/28/2015 - 4:36pm
MonteThough it does also help that nintendo's more colorful style is a lot less reliant on graphics than more realistic games. Wind Waker is over 10 years old and still looks good for its age.02/28/2015 - 4:33pm
MonteWith the Wii, nintnedo had the right idea. Hold back on shiny graphics and focus on the gameplay experience. Unfortunatly everyone else keeps pushing for newer graphics and it matters less and less each generation. I can barely notice the difference02/28/2015 - 4:29pm
MonteON third party developers; i kinda think they should slow down to nintendo's pace. They bemoan the rising costs of AAA gaming, but then constantly push for the best graphics which is makes up a lot of those costs. Be easier to afford if they held back02/28/2015 - 4:27pm
Matthew Wilsonhttp://www.forbes.com/sites/insertcoin/2015/02/28/the-world-is-nintendos-if-only-theyd-take-it/ I think this is a interesting op-ed, but yeah it kind of is stating the obvious.02/28/2015 - 2:52pm
prh99The government probably doesn't need an app, but I was think more along the lines of a company that was going to sell the collected info. “If you're not paying for the product, you are the product” sometimes even if you pay.02/28/2015 - 1:50pm
E. Zachary KnightWhat better way for the government to keep track of you than to get you to install an app that lets you insult the government.02/28/2015 - 11:03am
prh99No, but I looked it up and it's basically spyware. Their privacy policy says their apps tracks among other things your location and browsing habits via cookies.02/28/2015 - 8:20am
Ryan RardinHas anyone here heard of an app called iCitizen? It's basically Yelp for politicians.02/28/2015 - 5:16am
Andrew EisenAh, not linked in the way you (and everyone else) want and expect. That's true.02/27/2015 - 10:06pm
Matthew Wilsonthey are not linked in a way that tracks purchases though. the fact that they have to send a code for the other system shows that they are not linked in the way it counts.02/27/2015 - 9:39pm
Andrew EisenAccounts are already linked. Have been for quite a while. Also, Mario vs. Donkey Kong was announced as a cross-buy title during last January's Nintendo Direct.02/27/2015 - 9:25pm
Matthew Wilsonhttp://www.vg247.com/20…/…/27/olli-olli-3ds-wii-u-cross-buy/ I wounder if this is a sign that Nintendo may finally link accounts across the 3ds/wiiu in the near future.02/27/2015 - 9:18pm
prh99http://www.romanoriginals.co.uk/invt/70931?colour=Blue The dress does comes in white and blue but both have black lace and a sheer back top, I don't see gold or brown. 02/27/2015 - 8:54pm
ZippyDSMleeDungeons was a so bad so good game to me so I been keeping up with its sequel which will more of a Dungeon Keeper clone. As for pre order out of 7 preorders I was not burnt by 2... Add my contempt of most of modern game design.Ya I have all kinds of hurt.02/27/2015 - 8:40pm
MechaTama31I don't even want to know...02/27/2015 - 8:22pm
ZippyDSMleeFun? I can do fun…. I think LOL. Dungeons 2 is on preorder but not via steam... >> Hell I am breaking all kinds of personal butthurt rules to even THINK about pre order...02/27/2015 - 8:12pm
E. Zachary KnightHad some fun discussions about that dumb dress on Facebook. I opened the original picture in GIMP and sampled the colors and determined them to be Blue and Gold. People still say I am wrong.02/27/2015 - 7:41pm
 

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