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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ZippyDSMleeI mean 4 main classes and maybe 3 or 4 model’s each…I’am just not seeing it….03/06/2015 - 8:28pm
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ZippyDSMleeMechaCrash:Meh I've played more stuff that had pickups rather than set class's.03/06/2015 - 7:22pm
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Adam802http://www.mercurynews.com/crime-courts/ci_27662192/leland-yee-case-judge-pushes-corruption-trial-august03/06/2015 - 6:12pm
ZippyDSMleeNearly anyway the new UT game has color at least. And wow they changed to C++ 0-o03/06/2015 - 5:43pm
ZippyDSMleeCraig R.: Same reason why UT99/04 and UT3 are diffrent, gritty is the thing to do...at least it was... nearly everyone else grew out of dark and gritty….03/06/2015 - 5:40pm
ZippyDSMleeI doubt each model of characters in COH/COV/CO,ect are kept as unique model data.03/06/2015 - 5:39pm
ZippyDSMleemodel shape.03/06/2015 - 5:38pm
ZippyDSMleeMonte:I think it’s more a part of the engine, yes its more work but you should be able to have some sort of physical collision system in place to keep arms and stuff from clipping. Outside of that the data stored is just number variables to change the m03/06/2015 - 5:38pm
Andrew EisenAt least she's smiling in one of the pics.03/06/2015 - 5:31pm
Craig R.It's like somebody took the color palette and decided that anything approaching 'bright' is unacceptable03/06/2015 - 5:30pm
Craig R.Scratching my head as to why DC shows are as dark and drab, color-wise, as the movies look to be03/06/2015 - 5:30pm
MonteIf for instance you make the character fat, you need to make sure the animation of the character moving his arms and gun around, won't result in them clipping into the character's larger stomach03/06/2015 - 5:22pm
Monte@zippy, I imagine creating customizabel, vastly different body types would add a lot more complexity. Like making sure the character's animation still looks right. It can be done, but it can get complicated03/06/2015 - 5:19pm
Andrew EisenSupergirl TV costume: http://www.ign.com/articles/2015/03/06/first-photos-of-supergirl-revealed03/06/2015 - 4:49pm
prh99I think it probably far easier to add a character than strip a feature from game engine that was baked in from the start.03/06/2015 - 4:45pm
Andrew EisenAs I've said twice already, yes, strides in one area do not absolve anyone from criticism over where else they're falling short.03/06/2015 - 3:04pm
ZippyDSMleeI know I know one thing is not the other. Still worth nagging about.I still do not see why they do not put in body sliders and elt people make thier own body types....I'd do fat/pudgy or chibi befor I do ultra generic prefect body......03/06/2015 - 2:59pm
 

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