New games 'largely cannibalising users from old titles'
Social games titan Zynga has lost around 700,000 daily active users in the past five weeks, leading one financial analyst to raise concerns about the company’s proposed stock market launch in November.
“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 $10 billion range", said Doug Creutz, analyst for Cowen and Company.
“At least as disturbing has been the degree to which new launches have begun rolling over almost immediately after the initial launch”, he said.
New data suggests Zynga has suffered a 40 per cent drop in its daily users for three of its five latest releases. The decline is thought to have affected Empires & Allies, Pioneer Trail and Adventure Peak.
According to Creutz, the new titles are "largely cannibalising users from old titles, and failing to attract new users to Zynga’s portfolio".
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Despite releasing five games in the last four months, including Mafia Wars 2, Zynga’s overall user numbers dropped 1.5 per cent in the past five weeks.
So endless growth is not possible, even on the magic platform called Facebook? I'm shocked! Zyngas model has to be "monetize your current users" rather than "keep growing forever and ever", since there will be a cap on the active players on Facebook, and it will eventually be much cheaper and smarter to focus on getting another dollar out of every active player rather than converting new players into trying their games. If i was an analyst I would focus on DARPU and DARPPU rather than DAU for a giant such as Zynga, they can always inflate DAU when ever they want, with heavy ad spend...
Not surprising. Zynga needs to get back to basics. In other words - "It's about the USER - stupid" Zynga's utter contempt for the players who they want to rape for money is evident in their high-cash hiring of behavioral analysts to advise them on how to force the player to pay more money in "free to play" games, while laying off, or firing, their experienced game developers. The games are structurally falling apart as a result. Anyone can research this as a FACT by getting into a Zynga game and visiting the user forums, OR, searching the chatter on Facebook about Zynga games. Games not loading, games refreshing too many times in one short period, items disappearing, cash purchase buttons placed in a way to result in "accidental" purchases causing numerous appeals to Support to refund the cash with Support sometimes answering that the player has not suffered a loss. Lack of Cash Purchase Confirmation dialogues. Slow, laggy, or frozen game screens from incorrect implementation of new Flash code. Apparent lack of any of their income being used to get better, faster servers - at peak load time are absolute lag horrors. Top all of that off with a deliberate culture of hate in the forums for free-to-play players? Yes, Cash players are encouraged in the forums to belittle and call free-to-play players names and make fun of their troubles. The evidence is there, all one has to do is look. Thus it is no surprise that they are losing players. They only see is as cattle with wallets they hope to dupe out of more cash than you would spend on a subscription based game. They are getting the natural result of their own behavior.
Very insightful! As a user, I have wasted too much time and money on Zynga crap. They allow cheaters to overtake their games such a Mafia Wars and then wonder why legitimate users tune out. Zynga's price points are ridiculously high, and all this mouse clicking is a complete waste of time and just not enjoyable. They had success because they were new on the block, not because they had anything of value to offer, and they are collapsing on them selves. I predict chapter 11 within 6 months, and anyone would have to be an idiot to invest in their IPO.
