Zynga Stretched Too Thin?

May 3, 2013

Zynga, once the top Facebook social gaming developer, has recently come under fire from Facebook owner Mark Zuckerberg, due to its significant drop in earnings. This follows close on the heels of Zynga opening its own pay to play online casino site, and distancing itself from Facebook. We wonder if Zynga is over extending itself and turning its back on its proven market?

Zynga used to be one of Facebook’s top games developers, with an enviable expertise in developing additive social gaming titles. However, recently Zynga has diversified, and its stock has suffered. This seems to be a bad situation or Zynga, as the company struggles to find its new identity. Is it a social gaming developer? An online casino operator? Just what is it?

According to Mark Zuckerberg of Facebook, the Facebook gaming community is still growing, yet he singles out Zynga as an example of a company that is losing its way. Mark Zuckerberg actually states that there has recently been a massive 37$ drop in revenue over the first quarter of 2013 from Zynga, the company that used to be the top social gaming earner for Facebook with titles such as FarmVille and Zynga Poker being the most played games on the Facebook site.

Mark Zuckerberg seems rather upset by this, and has said that, “With the exception of our largest partner, Zynga — whose growth hasn’t been as awesome as everyone had hoped, the rest of community is actually growing quite well and is quite healthy. And so we’re pretty happy with that, and it’s a pretty diverse group. We’re up to 81 of the top 100 top grossing iOS apps and 70 of the top grossing Android apps are connected in with Facebook. So we’re getting good coverage, right?”

So we can see that Facebook is unhappy with Zynga, so just take a look at these statistics. Zynga’s daily users fell by 21%, active users by 13%, and DAU is down by 11%, these are pretty big numbers.

We cannot wonder how much of this is due to Zynga’s recent entry into the online gambling market with the release of its pay to play online casino site. Sure, it is good to diversify, but not at the cost of upsetting the likes of Facebook, where the company makes a significant amount of its revenue from.

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