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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Papa MidnightIt's hard to drape yourself in the glory of your righteous campaign when you're exposing the personal information of a person, and following up with a campaign of harassment (organised or ortherwise). 12 year olds calling your personal cell for Five Guys?10/02/2014 - 9:58am
prh99http://kotaku.com/anna-anthropy-designer-behind-dys4ia-and-triad-and-au-1448084641 <--relationship disclosed10/02/2014 - 9:57am
Papa MidnightEven to this day, that remains the primary citation of those embarking in it. That said, the whole "it's not about harrassment" thing is comparable to making an extremely racist statement, then following up by saying "but I'm not a racist."10/02/2014 - 9:56am
Papa MidnightI think EZK is more spot-on. This may have carried on far beyond it's genesis, but the true driving force of this whole astroturfing campaign was the angst of an ex-boyfriend of Zoe Quinn's.10/02/2014 - 9:54am
KronoAnd that's off the top of my head, specific to Kotaku.10/02/2014 - 9:54am
E. Zachary KnightKrono, yet no one can actually point at any "positive reviews" or otehr press given Quinn by Grayson.10/02/2014 - 9:53am
KronoBeyond that you have Patricia Hernandez writing reviews for, and plugging Anna Anthropy's work. Anna being Patricia's friend and former roomate.10/02/2014 - 9:52am
Sleaker@EZK - I believe there were a few more related to Patreon, and IGF. But regardless of the disclosure thing, that was only half of my statement, and I'm simply trying to speak on the reasons why GG got popular. But you sidestepped my last question there...10/02/2014 - 9:50am
KronoThe only questions is whether or you believe Grayson's previous friendship with her, and possible interest in starting a romance influenced his reporting.10/02/2014 - 9:48am
Krono@EZK There's nothing supposed about Grayson and Quinn having a relationship. Kotaku itself confirmed said romance matching the timeline Eron posted: http://goo.gl/yLgdx910/02/2014 - 9:46am
prh99So far the only "crimes" seem to be editorializing and collaboration outside their respective organizations. If they are going to persist at least point to something actually questionable.10/02/2014 - 9:45am
E. Zachary KnightSo aside from the supposed Kotaku/Quinn relationship, do you have a specific example of said lack of disclosure?10/02/2014 - 9:36am
prh99#gamergate renamed #butthurtfarce10/02/2014 - 9:31am
Sleakerwhat the message that they are actually trying to convey is.10/02/2014 - 9:30am
Sleakerthe fault of the journalist? If a large number of people read these articles and all came to the same conclusion that Gamers were being attacked by journalists as a whole, then it seems the burden of journalists to do a better job of explaining...10/02/2014 - 9:29am
Sleaker@EZK - It's not a surprise that articles came out. The surprise is when journalists fail to disclose relationships as they write about the trends, and the content by which the articles contain. Perhaps a large portion was misinterpreted, but isn't that10/02/2014 - 9:28am
prh99It definitely prolonged it, we wouldn't be hearing about Intel if not for Gamers are over/dead. Just additional wood for the fire.10/02/2014 - 9:23am
E. Zachary KnightConster, which sites associated "ALL" gamers with the harassment?10/02/2014 - 9:22am
E. Zachary KnightIs it really a surprise that 15 news sites responed to a very loud and very public shaming campaign against a woman critic of sexism and a woman being attacked unjustly because of the words of an ex-boyfriend.10/02/2014 - 9:19am
ConsterSo a bunch of assholes decided to harass people, sites wrote negative articles associating all gamers with said assholes, and people got so angry about the articles they decided to associate themselves with said assholes?10/02/2014 - 9:18am
 

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