Investors spooked over EA's Facebook withdrawal

Investors spooked over EA's Facebook withdrawal
Seth Tipps

By Seth Tipps

April 16th 2013 at 8:17AM

Facebook, Zynga, and EA stock dives following three-game shutdown

EA's decision to shut down three Facebook games has led to stock market setbacks for the social network and a few game makers on the platform.

With the publisher citing a lack of consumer interest for its decision to pull The Sims Social, Sim City Social, and Pet Society from the platform, The Street reports some experts are taking the message that Facebook gaming is in serious trouble.

"It's just harder to get people to commit to games they don't pay for," said Edward Woo, senior research analyst for Ascendiant Capital Markets.

This suggests EA's decision to pull The Sims Social - which still has five million users and 500,000 DAUs - means the publisher is struggling to convert users to customers.

EA's stock dropped 3.81% to $16.91, Zynga fell over five percent to $3.22, and Facebook itself declined by 3.21% to $26.52.

It wasn't just a bad day for these companies; the Nasdaq fell 2.38% today, and over the past few weeks Zynga's fortunes have been closely tied to the fluctuations of the general market.

This could mean the concern is missplaced, but Zynga has been trying to loosen ties to Facebook for months in favor of the booming mobile scene.

Woo thinks the company is still too tied to the platform though, and that it will suffer accordingly.

"Games overall are not as important to Facebook .... EA has their traditional buy the game for $60 and go home and play," he said. Zynga -- that's their only business."