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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WonderkarpAnd the GamerGate Girls Huffington Post Video should have been on this site weeks ago http://www.huffingtonpost.com/2014/10/15/female-gamers-gamergate_n_5990310.html11/21/2014 - 12:46pm
Wonderkarpits not getting dropped, Monte. Its become a defiant cry in the face of adversity and lies11/21/2014 - 12:42pm
Wonderkarphttp://press.gamergate.me/dossier/ The GamerGate Press Site. All the Information and Evidence that supports their arguments and goals. This is the 5th time I've posted this.11/21/2014 - 12:40pm
MonteIts why i feel that they would be better off dropping the gamergate tag. The tag is far to tainted and they attract the anti-fem trolls. Find a new tag, loose the baggage and then you can have a discussion on journalism free of distractions11/21/2014 - 12:40pm
WonderkarpGG got together and put together a press site that contains all their evidence and arguements in a single easy FAQ. I've posted it here many times to silence.11/21/2014 - 12:36pm
MonteIt does seem like GG spends more time trying to defned itself from accusations than actually talking about journalism; hence one reason why they keep coming back to the topic of feminists despite them having nearly nothing to do with gaming journalism11/21/2014 - 12:36pm
Wonderkarpwhat do you mean "Their own fault"? are you saying its Gamergates fault that the 11 dead gamer articles were written? that it was GamerGates fault when they got together to cry out that they were shouted down by louder megaphones?11/21/2014 - 12:35pm
NeenekoThere is unity of attack, and unity of defense, but not of message or identity. Which the group's own defensiveness has blinded to them since it is chalked up to 'media is out to get us' as opposed to their own fault.11/21/2014 - 12:10pm
NeenekoOh unity I will give you, it is one of the group's weakest points.11/21/2014 - 12:07pm
WonderkarpI dont think so. There's a lot of Unity in Gamergate. OPSkynet has only strengthend the group and brought people together. and I spent a couple months "Gorillas in the Mist"ing the group11/21/2014 - 11:54am
NeenekoYou might be a bit too deep in that trench then if you are missing the other factions.11/21/2014 - 11:51am
MaskedPixelantehttp://www.joystiq.com/2014/11/21/sunset-overdrive-free-this-saturday/ Sunset Overdrive free on the XBO tomorrow only.11/21/2014 - 11:43am
Wonderkarpthere also arent "Various Factions" in GamerGate. No Harrassment has been linked directly too GamerGate. I'm deep in the trenchs and there arent any factions.11/21/2014 - 11:38am
NeenekoI would disagree that it has 'never been the case', for various factions perhaps not, but what made GG blow up was the intersection between submerged issues, and that is one of them.11/21/2014 - 11:33am
Neeneko@Zippy - to a point, but consumers also tend to like what they are already comfortable with, so tropes in general tend to have a comforting feel. Just like mechanics and controls tend to be similiar.11/21/2014 - 11:31am
ZippyDSMleeAren't most sexiest tropes jsut cheap/poor creativity more so than pure markaibility?11/21/2014 - 11:19am
Wonderkarpbut some people have been successfull in drawing attention too themselves to steer the conversation from ethics in journalism to women in gaming when that has never been the case.11/21/2014 - 11:17am
WonderkarpZachary, not really. the Quinn story was just more gas to a ready to burn fire. If it wasnt her, it would have been some other scandal just waiting to happen. Just look at Doritosgate. It was the 11 Dead Gamer articles that threw the match in the fire.11/21/2014 - 11:16am
PHX Corphttp://www.polygon.com/2014/11/21/7258775/ubisoft-suggests-assassins-creed-unity-players-remove-all-game Ubisoft suggests Assassin's Creed Unity players remove all game contacts to prevent crashes -Facepalm-11/21/2014 - 10:56am
E. Zachary KnightWonderkarp, That may not be an issue with you and the faction of gamergate you associate with, but it was and still is a strong influence on gamergate and its founding.11/21/2014 - 10:12am
 

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