Free Essay

Zynga Stumbled

In:

Submitted By antimonymustard
Words 361
Pages 2
Mark Pincus On Why Zynga Stumbled - Earnings Call
0 comments, 0 called-out + Comment now
+ Comment now

Mark Pincus (Photo credit: Joi)
Zynga didn’t execute on its recent new games and it underestimated the speed of mobile adoption, which led to its current problems, Zynga CEO Mark Pincus said in a conference call with analysts following its earnings release Wednesday.

Forbes Staff

In part to bring back its high growth, Zynga plans to launch two new web games per quarter and four games per quarter in 2013. It also plans to expand to other genres such as casino games and “player versus player” conflict games, Pincus said.

Zynga underperformed due to two factors, Pincus said. First, the company didn’t execute well on web games such as CityVille and CastleVille. The company found it “more challenging” to maintain its historical games and it had a “faster decline in bookings than expected.” Or to put it simply, “We didn’t create enough heat for players” in content and features, Pincus said. Also the company didn’t bring new games to market fast enough to offset the declines from the older games. Secondly, mobile adoption was faster than Zynga expected. That increased competition for Zynga’s users.

Still Pincus pointed to successes in its web games FarmVille 2 and ChefVille. FarmVille 2 had 17 million installs in its first 21 days. On the key mobile sector, Pincus said mobile now represents 20% of Zynga’s bookings. The company also reorganized its staff so that all teams have web and mobile developers working together. All new games will have mobile games as part of their release. Zynga is also rolling out its “With Friends” mobile gaming network, which includes its own and third party mobile games. Pincus believes Zynga can do the same type of cross-promotion on mobile games that it did on Facebook games.

Pincus highlighted two new businesses: advertising and real money gaming. On advertising, the company has been pushing video ads and rewards based advertising, where users watch a video to get virtual goods for games. Real money gaming will launch in the first half of 2013 with the company’s partnership with bwin.party.

Similar Documents

Free Essay

Opi Zynga

...Zynga una empresa que desarrolla videojuegos sociales en línea, basándose en los sistemas de Web 2.0 y los presenta como aplicaciones widget en redes sociales como Facebook o MySpace. Con más de 240 millones de usuarios activos mensuales en sus juegos CityVille, FarmVille, Zynga Poker, etc; es considerado líder mundial y una de las almas de Facebook. Zynga lanzó su Oferta Pública Inicial el 16 de diciembre de 2011, con sus títulos a 11 dólares, (el precio anunciado a principios de diciembre fue de entre 8.5 y 10 dólares), pero las acciones se devaluaron en su primer día de su salida a la bolsa. Meses antes, se había especulado que en el lanzamiento de su OPI la compañía conseguiría una valoración de hasta 14.000 millones de dólares, pero luego ésta bajó a 10.000 millones de dólares, y finalmente al salir sus acciones al mercado, la valoración de la compañía fue de 7.500 millones de dólares. En su primer día de lanzamiento el precio cayó casi un 15 % por debajo del precio inicial, y casi un mes después, el precio seguía bajando, con un piso de 8 dólares, es decir la acción acumulaba un 27% de rendimiento negativo, como se puede ver en el siguiente gráfico que muestra los precios entre el 15 de diciembre de 2011 y el 15 de enero de 2012: Todo indica que inicialmente hubo una sobrevaloración de los títulos, pues la volatilidad de la economía, sumado a la poca confianza de los inversores en la compañía, hicieron bajar su cotización inicial. Sin embargo la compañía...

Words: 464 - Pages: 2

Premium Essay

Critical Analysis

...Mark Pincus founded Zynga, a social game service provider company, in 2007. During the first few years, Zynga was very successful and generated a profit of almost $100 million with successful games such as FarmVille, Mafia Wars, and CityVille. However, in 2013, the number of Zynga users was rapidly decreasing. According to AppData, the MAUs (Monthly Average Users) for Zynga have fallen below 127 million, which was the lowest it has ever been. In addition, stock prices dropped from $14 to $3 per share causing a net loss of almost $600 million. As a result Pincus was kicked off the board and replaced by another CEO. Now Pincus has returned to Zynga in hopes of turning the company back around, but the problem is how and in which market should Pincus choose to do so in. Pincus has already started to make some changes with his return, but Zynga needs to do a lot more if it wants to compete again. Analysts have made recommendations but Zynga needs to flat out create new hit games. Currently, Zynga has two opportunities that will decide which path they take: One route involves selling to a private investor to complete its turnaround behind closed doors. The other route is where Zynga makes big financial bets on building potential mega-hits and stays public. The first strategy Zynga has is to stay public, and not sell to a private investor. At their current price, yes, Zynga can go private, but it doesn’t mean that will happen. There are four main benefits for Zynga to stay public and...

Words: 808 - Pages: 4

Premium Essay

Strategic Management

...SIXTH EDITION STRATEGIC MANAGEMENT IN ACTION Mary Coulter Missouri State University Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Editor in Chief: Stephanie Wall Senior Acquisitions Editor: April Cole Editorial Project Manager: Claudia Fernandes Director of Marketing: Maggie Moylan Senior Marketing Manager: Nikki Ayana Jones Marketing Assistant: Gianna Sandri Senior Managing Editor: Judy Leale Production Project Manager: Kelly Warsak Senior Operations Supervisor: Arnold Vila Operations Specialist: Cathleen Petersen Creative Director: Blair Brown Senior Art Director: Kenny Beck Text Designer: LCI Design Cover Designer: LCI Design Cover Art: Svetoslav Iliev/Shutterstock.com Permission Specialist: Brooks Hill-Whilton Media Project Manager, Production: Lisa Rinaldi Senior Media Project Manager, Editorial: Denise Vaughn Full-Service Project Management and Composition: Integra Printer/Binder: RRD/Willard Cover Printer: Lehigh-Phoenix Color Text Font: 10/12, Times LT Std Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within text. Copyright © 2013, 2010, 2008 Pearson Education, Inc., publishing as Prentice Hall, One Lake Street, Upper Saddle River, New Jersey 07458. All rights...

Words: 154599 - Pages: 619