In the jungle called Wall Street, the past quarter wasn't a happy adventure for Zynga. The gaming company disappointed analysts by falling 42% in extended trading. Analysts had predicted better second quarter revenue and profit. Problems were blamed on people losing interest in playing social games. Zynga blamed Facebook for making it hard for users to find their games since changing aspects of the site.
Optimistic figures had included sales that were estimated at 343.1 million and profits at six cents a share. Instead, reports showed only 332.5 million in sales and a meager one center per share profit. Competition is cited as well as apps moving to mobile devices, although Texas HoldEm Poker went on the iPhone in 2008. Also, folks are buying less virtual items for use in their games, and fewer purchases translate into less dollars in Zynga's pocket.
Texas HoldEm Poker is one of Facebook's most popular games
Pointing the finger again, John Schappert, chief operating officer of Zynga, told Bloomberg that Facebook is highlighting new games to the detriment of older established titles. He also mentioned that Facebook had changed some of their algorithms for surfacing which worked against Zynga.
Texas HoldEm Poker and Bubble Safari, an arcade game where a monkey has to shoot down pieces of hanging fruit to save his friends, are two of the most popular Facebook games. Zynga holds the top five offerings, so one wonders how Zynga's competition is faring. Those two games alone account for more than 38 million users. Still, even Zynga's bubble seems to be deflating.
CityVille is a big part of Zynga's revenue
FarmVille, CityVille, and Texas HoldEm make up 60 percent of Zynga's revenue according to CFO Dave Wehner. So FarmVille and gambling fans, what are you waiting for? Get back to playing or your stock will continue to dwindle in value.
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