Zynga posts massive losses, slashes headcount

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ZyngaDon

Zynga became even more interesting to watch since ex-Xbox 360 lead, Don Mattrick, left the Redmond giant to join the struggling social gaming company. And it looks like his first order of business is to post massive losses, reverse their plan to get into real world gambling and then fire 520 people.

Ah Don…we don’t miss you in the console world..

Anyway enough reminiscing; let’s look at the facts. In the last quarter Zynga posted earnings of $213 million, down from $332 last year this time which is a drop of 31%. Not only did revenue drop but also the number of active players dropped from 72 million a day down to 39 million. Which is a 45% drop. This shows they got better at monetising but far more worryingly is that they alienated a lot of gamers.

To pile more worry on Don’s shoulder,s this drop also reflects a drop of 24% on the number of active gamers they had from Q1 this year. The number of unique paying gamers followed the same trend and dropped from 4.1 million to 1.9 million users.

Zynga also announced they would not be entering the real money gaming world which sent their stock price plummeting as this was seen as their saviour by many investors  – but Don is still confident things will get better.

“To do that (grow again), we need to get back to basics and take a longer term view on our products and business, develop more efficient processes and tighten up execution all across the company. We have a lot of hard work in front of us and as we reset, we expect to see more volatility in our business than we would like over the next two to four quarters. I’m privileged to lead Zynga and I look forward to spending more time with our players, employees and shareholders.”

But why did they drop so badly? Well these are the 6 games they released in the last quarter

  • Hidden Shadows
  • War of the Fallen
  • Draw Something 2
  • Battlestone
  • Solstice Arena
  • Running with Friends
Read  Farmville developer Zynga secures Disney partnership to make Star Wars mobile game

Anyone recognise anything other than Draw Something 2, which admit it, you are only recognising because the original Draw Something was massively popular for a month?

Last Updated: July 26, 2013

Gavin Mannion

I for one welcome our future robotic overlords

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