Company 'sidesteps' questions after accusations of 'sketchy numbers'
Facebook games giant Zynga wants to double the number of people who pay for virtual items across its games library, the firm’s CEO was quoted as stating.
But, in a meeting with dozens of potential investors, Mark Pincus appeared to sidestep questions on Zynga’s alleged issues with player retention, according to a Reuters report.
Zynga is the biggest social games firm in the west with about 225 million total monthly active users, of which about 3.5 per cent (7.7 million) are considered unique paying players.
"We could see that doubling," Pincus said, ahead of the company’s long-awaited IPO.
Generally, paying-user targets on free-to-play games is around the 2-3 per cent range.
Noel Llopis, founder of the iPhone games studio Snappy Touch, recently claimed that “80-90 per cent of profits from freemium games comes from 0.5 per cent of users”.
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Zynga has set its shares at $8.50 to $10, a move which values the company at about $7 billion – less than half the $20 billion estimates that circulated over the summer.
However it is not unusual for a company to set its share price low to drum up interest, in turn building momentum on its value.
Broader market turmoil, which had ripped through the US over the summer, had caused Zynga to delay its IPO. In the intervening months the extent of the four-year-old company’s profitability and company ethics has come under intense scrutiny.
Zynga’s $10 share price would raise the company about $1 billion, according to a regulatory filing.
Recently, Take-Two CEO Strauss Zelnick blasted Zynga’s numbers as ‘sketchy’, claiming that the company quickly churns through players.
When asked about Zelnick's remarks, Zynga COO John Schappert said his company can quickly launch new games, attracting more players.
Pincus wants to increase his paying customer base from 3% to 7%? And at the same time, he spouts that it doesn't matter that older players are leaving in droves? Seriously? Well I'm one of the 3% and an older player and have been rethinking spending anymore time and money on this game - and I'm sure I'm not the only one. Zynga customer support and care is a joke - even if you are a paying player!!! How do you increase your paying player base when you do not care about or respect or listen to them? Pincus needs to pull his head out of his proverbial posterior and take care of his players - he can keep throwing out new games, but his reputation will proceed him. He won't continue to attract new players - the word is out. Stay clear of this investment!
All the new games in the world won't save Zynga UNLESS they are vastly improved in performance. I've played two Zynga games for two years now and have seen my "neighbors" decline constantly. Due to poor quality of games and constant badgering for money (yes I know they need it to continue) they have been losing player INCLUDING many that have been paying to play. As an investor I would not have touched this IPO.
If they can't put out a quality game they can only hope they can put out game after game...but players are wise to this because like myself they often play more than just one. They are less inclined to move on to a new Zynga game knowing that it will also be full of bugs.
