Remember when Zynga was this highly valued company with lots of Facebook games that were beloved? Yeah, well, not so much anymore.
Zynga reports that some of its more popular games like Farmville are losing users. Farmville itself is down to 20 million players from a peak of 80 million. Exacerbating the problem is the fact that Zynga doesn’t have the opportunity to spam the crap out of you on your Wall anymore and the fact that Facebook is cheating on it with other game developers.
“The biggest factor impacting current performance appears to be the way Facebook is surfacing gaming content on its platform,” JP Morgan’s Doug Anmuth wrote in a note to clients.
Surfacing refers to how a website displays content.
Facebook recently tweaked the way users find games in its app center — giving prominence to newer titles and pushing down older games — making it difficult for users to find some of Zynga’s most popular titles.
Since its $9 billion peak, Zynga has plunged to about $2 billion in value. And the bad news isn’t quite done yet: Part of the reason investors are so jittery is the fact that Facebook has its first earnings call coming up and nobody knows exactly what to expect from it. The big question is whether they can keep other advertisers from following in GM’s footsteps and yanking their ad buys. Especially when they seem to not really care all that much about advertising anyway.
Investors praying the stock can come back to $40 won’t be the only ones listening to that call with gritted teeth, it seems.
(image courtesy Zynga)