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

 
Forgot your password?
Username :
Password :

Shout box

You're not permitted to post shouts.
Sora-ChanSo it's just a matter of having better emulation software. If it can be done with a 3DS game, with all the memory and what not it takes up, it can be done with a GBA title through emulation.07/29/2014 - 7:30pm
Sora-ChanOther VC titles for the NES and Gameboy had the same setup where you couldn't access the homescreen without quitting out of the game til a later update when those games were released for the public outside of the founder program.07/29/2014 - 7:28pm
Sora-Chanthe 3DS can, and does, run GBA games, as seen by the founder gifts, which included a number of GBA titles. As for running GBA games and still having access to the home screen, I beleive it's more of the game emulation software needs to be updated.07/29/2014 - 7:27pm
Matthew Wilsonthe 3ds already swaps os's with the original ds. plus I dont think people expect miverse interaction when playing a gba game.07/29/2014 - 6:06pm
MaskedPixelanteBut that's not the issue, the 3DS is perfectly capable of emulating GBA games. The problem is that it doesn't have enough available system resources to run it alongside the 3DS OS, and thus it doesn't have access to stuff like Miiverse and save states.07/29/2014 - 5:45pm
Matthew WilsonI am well aware that it requires more power, but if a GBA emulator could run well on a original psp, than it should work on a 3ds.07/29/2014 - 5:36pm
ZenThe reason the SNES could run Gameboy, or the Gamecube could run GBA was because their adapters included all of the necessary hardware to do it in the respective add-ons. The systems were just conduits for control inputs and video/sound/power.07/29/2014 - 4:51pm
ZenMatthew: Emulation takes more power than people realize to run a game properly. You can make something run on less, but Nintendo...as slow as they are at releasing them..makes them run as close to 100% as possible. Each game has its own emulator for it.07/29/2014 - 4:47pm
Matthew Wilsonkind of hard to believe since the 3ds is atleast as powerful as the gamecube hardware wise.07/29/2014 - 4:27pm
MaskedPixelanteYes, the 3DS has enough power to run 16-bit emulators, but not at the same time it's running the 3DS systems themselves. You could run the games, but you wouldn't get save states or Miiverse.07/29/2014 - 4:04pm
InfophileRunning GBA on 3DS shouldn't be hard. The DS had flashcarts sold for it that added just enough power to emulate GBA and SNES games, so the 3DS should have more than enough natively.07/29/2014 - 3:37pm
MaskedPixelanteIt's a bunch of people whining about boycotting/pirating Trails in the Sky FC because XSEED didn't license the Japanese dub track, which consists of about 10 lines per character.07/29/2014 - 11:27am
Sleaker@MP - devolver Digital issued a twitter statement saying they would replace the NISA pledge.07/29/2014 - 10:57am
E. Zachary KnightIs that a discussion about RIAA member music labels?07/29/2014 - 10:48am
MaskedPixelantehttp://steamcommunity.com/app/251150/discussions/0/43099722329318860/ In this thread: Idiots who don't understand how licensing works.07/29/2014 - 9:20am
MaskedPixelantehttp://www.joystiq.com/2014/07/28/gaymerx-in-dire-straits-after-nis-america-allegedly-backs-out-of/ NISA backs out of GaymerX support, but it seems like the only people crying foul are GaymerX.07/29/2014 - 6:30am
Papa MidnightIt's not bad so far, but I am honestly not sure what to make of it (or where it's going for that matter)07/28/2014 - 9:44pm
Matthew Wilsonis it any good?07/28/2014 - 9:36pm
Papa Midnight"Love Child" on HBO -- anyone else watching this?07/28/2014 - 9:27pm
MaskedPixelanteNah, I'm fine purple monkey dishwasher.07/28/2014 - 4:05pm
 

Be Heard - Contact Your Politician